The Issue At issue in this proceeding is whether the Department of Environmental Protection's decision to reject all bids submitted for the project entitled BDRS 52-01/02 was illegal, arbitrary, dishonest, or fraudulent.
Findings Of Fact Parties Petitioner, All America Homes of Gainesville, Inc. (All America), is a corporation doing business in the State of Florida. All America submitted a timely written bid in response to the Department's ITB and filed timely protests to the Department's actions. The Respondent, the Department of Environmental Protection, is an agency of the State of Florida which manages and operates state parks under its jurisdiction, and solicits construction projects in state parks, pursuant to Chapter 258, Part I, Florida Statutes, through its Division of Recreation and Parks, Bureau of Design and Recreation Services. The ITB In November, 2001, the Department issued an ITB on a construction project entitled Hillsborough River State Park Concession Building, project number BDRS 52-01/02. The ITB included the Bid Specifications for the project. Bids were required to be submitted no later than 3:30 p.m. on Tuesday, December 18, 2001, at the Bureau's Tallahassee, Florida, office. The written Specifications define several terms, including, but not limited, to the following: ADDENDUM: A written explanation, interpretation, change, correction, addition, deletion, or modification, affecting the contract documents, including drawings and specifications issued by the OWNER [Department] and distributed to the prospective Bidders prior to the bid opening. ALTERNATE BID: Separate optional bid item for more or less project requirement used for tailoring project to available funding. Also may consist of alternate construction techniques. BASE BID: Formal bid exclusive of any alternate bids. BID FORM: The official form on which the OWNER requires formal bids to be prepared and submitted. ORAL STATEMENTS: Verbal instruction. NOTE: No oral statement of any person, whomever shall in any manner or degree modify or otherwise affect the provisions of the contract documents.[1] SEALED BID: The formal written offer of the Bidder for the proposed work when submitted on the prescribed bid form, properly signed and guaranteed. The Bid Specifications also contained the following relevant sections: Alternatives If the OWNER wishes to learn the relative or additional construction cost of an alternative method of construction, an alternative use of type of material or an increase or decrease in scope of the project, these items will be defined as alternates and will be specifically indicated and referenced to the drawings and specifications. Alternates will be listed in the bid form in such a manner that the Bidder shall be able to clearly indicate what sums he will add to (or deduct from) his Base Bid. The OWNER will judge for himself that such alternates are of comparable character and quality to the specified items. The Order of the alternate may be selected by the Department in any sequence so long as such acceptance out of order does not alter the designation of the low bidder. ADDENDA If the Consultant[2] finds it would be expedient to supplement, modify or interpret any portion of the bidding documents during the bidding period, such procedure will be accomplished by the issuance of written Addenda to the bidding documents which will be delivered or mailed by the OWNER'S Contracts section to all bidders who have requested bidding documents. Interpretation No interpretation of the meaning of the drawings, specifications or other bidding documents and no correction of any apparent ambiguity, inconsistency or error therein will be made to any Bidder orally. Every request for such interpretation or correction should be in writing, addressed to the Consultant. All such interpretations and supplemental instructions will be in the form of written Addenda to the bidding documents. Only the interpretation or correction so given by the Consultant in writing and approved by the OWNER shall be binding, and prospective Bidders are advised that no other source is authorized to give information concerning, or to explain or interpret, the bidding documents. B-16 Bid Modification Bid modification will be accepted from Bidders, if addressed as indicated in Advertisement for Bids and if received prior to the opening of bids. No bid modification will be accepted after the close of bidding has been announced. Modifications will only be accepted if addressed in written or printed form submitted with the bid in sealed envelopes. Telegrams, facsimiles, separate sealed envelopes, written on printed modifications on the outside of the sealed envelopes will not be accepted. All bid modifications must be signed by an authorized representative of the Bidder. Modification will be read by the OWNER at the opening of formal bids. B-21 Rejection of Bids The OWNER reserves the right to reject any and all bids when such rejection is in the interest of the State of Florida, and to reject the bid of a bidder who the OWNER determines is not in a position to perform the work. B-23 Award of Bid . . .The qualified Bidder submitting the lowest bid will be that Bidder who has submitted the lowest base bid plus any selected alternates. . . . The OWNER reserves the right to waive any minor irregularities in bids received when such waiver is in the interest of the OWNER. The Award of Bid will be issued by the OWNER only with responsible Bidders, found to meet all requirements for Award of Bid, qualified by experience and in a financial position to do the work specified. Each bidder shall, if so requested by the OWNER, present additional evidence of his experience, qualifications and ability to carry out the terms of the Agreement. (Emphasis in original, except for Section B-10.) The Bid Form is included with the Specifications and provides in part: Base Bid: Furnish labor, equipment, Lump Sum $ supervision and material to construct a new concession building of 2940 square feet located at the Hillsborough River State Park along with the alteration of the existing concession building according to plans and specifications. Alternate #1: Furnish labor, equipment, Add Amt.$__ supervision and material to renovate the existing concession building according to plans and specifications. There is a separate section for "Allowances," i.e., Section 01210, for the Hillsborough State Park. This section provides in part: SECTION 01210 – ALLOWANCES * * * 1.2 SUMMARY This Section includes administrative and procedural requirements governing allowances. Certain materials and equipment are specified in the Contract Documents and are defined by this [sic] specifications as material and labor to be provided against a pre-determined allowance. Allowances have been established in lieu of additional requirements and to defer selection of actual materials and equipment to a later date when additional information is available for evaluation. If necessary, additional requirements will be issued by Change Order. * * * 3.3 SCHEDULE OF ALLOWANCES A. Allowance #1: Include in the base bid an allowance for the purchase and installation of. . . kitchen equipment. . . . The total dollar amount of the allowance to be included shall be $12,000.00. There is also a separate section for "Alternates," i.e., section 01230, for Hillsborough River State Park, which provides in part: SECTION 01230 – ALTERNATES * * * 1.3 DEFINITIONS Alternate: An amount proposed by bidders and stated on the Bid Form for certain work defined in the Bidding Requirements that may be added to or deducted from the Base Bid amount if OWNER decides to accept a corresponding change either in the amount of construction to be completed or in the products, materials, equipment, systems, or installation methods described in the Contract Documents. The cost or credit for each alternate is the net addition to or deduction from the Contract Sum to incorporate alternate into the Work. No other adjustments are made to the Contract Sum. . . . . 3.1 SCHEDULE OF ALTERNATES A. Alternate No. 1: Renovate the existing concession building in its entirety as shown in the drawings and specified herein. (emphasis added.) At this stage of the bidding documents, the contractor/bidder is requested to provide a Base Bid/Lump Sum on the Bid Form to "[f]urnish labor, equipment,. . .to construct a new concession building," and to provide an additional and separate amount for Alternate No. 1 to "[f]urnish labor, equipment, . . . to renovate the existing concession building." On December 13, 2001, the Bureau issued "Addendum No. One (1)" (written by the architect) to the ITB on the "Hillsborough River State Park – Concession Building." The Addendum contained the following relevant sections: Specification Section 01210: Allowances Add the following new paragraph 3.3.B: ”Allowance #2: Include in the base bid an allowance for the renovations of the existing concession building; renovations shall be defined by the Owner. The total dollar amount of the allowance to be included shall be $25,000." Specification Section 01230: Alternates Modify paragraph 3.1.A. as follows: "Alternate No. 1: Renovate the existing concession building as defined by the Owner, and as provided for under Section 01210, Allowances." (emphasis added.) Each contractor was required to sign the Addendum and attach it to the bid. By definition, and pertinent here, an addendum is an additional written instruction to a contractor during the bidding process. Based on the weight of the evidence, the purpose of this Addendum was to require the contractor to include a $25,000.00 Allowance (for Allowance # 2) in the Base Bid, for the work which might be performed if the Department requested the work to be performed for Alternate No. 1, i.e., for the renovation of the existing concession building.3 (The Department's architect decided it would cost approximately $25,000.00 to renovate the existing concession building, hence Allowance # 2.) In other words, the Addendum does not have a specific dollar amount to be included for Alternate No. 1. Rather, the $25,000.00 is an Allowance for the work described as Alternate No. 1, but the amount is to be included in the Base Bid and not as a separate line item, dollar amount. But, importantly, the Addendum did not delete the potential work to be performed as described in Alternate No. 1, although Mr. Bowman and others believed that the Addendum deleted Alternate No. 1. It deleted the necessity to place a specific dollar amount on the Bid Form for Alternate No. 1. (Mr. Bowman is a registered Professional Engineer and a licensed contractor. He has worked for the Department for 15 years and has served as Bureau Chief for two years. He supervises the contract section and the design section, which was responsible for preparing the technical plans and specifications and bidding out the job.) Mr. Bowman offered the following explanation why he believed the Addendum was confusing: Okay. I think the confusion that was created, you know, I think the addendum in itself, you know, said add $25,000 to the base bid, but then on the bid form, it still had the space down there for alternate number one, which alternate number one, which alternate number one had become $25,000 that was to be allowed for the concession building, and I think that's where the confusion came in because I think they were still confused, that they weren't really sure that they should not put that 25 down there but they knew they had been told in the addendum to do it and I think that's the reason for the notes and we got to the correspondence on the bid form, was they wanted to make sure that that's what we were wanting to do. And I think that's where the confusion came in. Like I said, it's always, if you could go back and do it again, it would be much wiser just to issue a whole new bid form and then we wouldn't be here today. But, we didn't do that. Okay. So, that's why we are here. The language in this Addendum, when read with the original Bid Specifications, apparently caused confusion with some of the bidders on the project. Several bidders called Marvin Allen (an architect and project manager for the Department's Bureau of Design and Recreation Services) prior to the submission of the bids, to clarify how the $25,000.00 Allowance should be shown on the Bid Form. (Mr. Allen did not author any of the specifications, including the Addendum.) He was listed as a contact person. He did not contact any bidders. But, Mr. Allen recalled telling each bidder who asked that the Allowance of $25,000.00 should be included in the Base Bid. But, he does not recall the names or numbers of the bidders who called, "possibly" three, four or five. Mr. Allen believed the Addendum was clear. According to Mr. Allen, the bidders who called him found the Addendum confusing. The oral responses to the bidders can be construed as interpretations of the Addendum. However, pursuant to Section B- 10 of the Specifications, any such interpretations were required to "be in the form of written Addenda to the bidding documents." Also, any such questions should have been in writing. If Section B-10 were complied with, all bidders would have been potentially on the same footing, or, at the very least, would have had access to a written clarifying document. Opening of the Bids On December 18, 2001, the bids were opened by Mike Renard, Contracts Manager with the Bureau of Design and Recreation Services, and Susan Maynard, Administrative Assistant. Mr. Dwight Fitzpatrick, a representative of All America, also attended the bid opening. The Bid Form submitted by Nelco showed a Base Bid of $355,478.00 (Lump Sum $355,478.00), and also showed an amount of $25,000.00 on the Alternate # 1 line (Add Amt. $25,000.00). See Finding of Fact 6. (It was clear to Mr. Renard that the $25,000.00 should have been included on Nelco's Base Bid. But Mr. Renard believed that Nelco submitted a responsive bid because the Department only accepted the Base Bid. Mr. Bowman agreed.) Nelco was the only one of five bidders to have a dollar amount in the Alternate #1 line under "Add Amt. $ ." All America submitted the second lowest Base Bid of $362,000.00. There was also a hand-written note on the All- America Bid Form that stated: "Addenda # 1 instruction to place $25,000 allowance in both Base Bid and as alternate # 1." Another hand written note was located below the "Add Amt. $-0-" line: "amount added in Base Bid with $25,000 allowance per Marvin Allen." The Department considered All America's bid responsive. It is a fair inference that three out of five of the other Bid Forms contained language indicating that the bidders were relying on Addendum No. One by placing the $25,000.00 Allowance in the Base Bid.4 It is uncertain whether they did so in light of the instructions of Mr. Allen concerning how to complete the Bids Forms. However, given the nature of the calls to Mr. Allen, there is a reasonable inference that there was some confusion among some of the bidders. The Department determined that Nelco submitted the lowest Base Bid, but the Department's staff had a question as to whether Nelco had included the $25,000.00 in its Base Bid. After conferring with his superiors, Mr. Renard was instructed to call Nelco to make certain that its Base Bid included the Allowance amount ($25,000.00). Mr. Renard spoke with Steve Cleveland, Nelco's Project Manager, "to verify the fact that [Nelco] had the allowance in their base bid." Mr. Cleveland orally confirmed that Nelco's Base Bid included the $25,000.00 Allowance. Mr. Renard asked Mr. Cleveland to send him a letter verifying this statement. Mr. Renard viewed this inquiry as a request for clarification or verification, not an opportunity for Nelco to modify its bid. Mr. Bowman agreed. (Mr. Renard did not believe Addendum No. 1 was confusing.) In a letter dated December 20, 2001, Mr. Cleveland confirmed that Nelco’s Base Bid of $355,478.00 included the Allowance amount and that Nelco could still perform the contract if the $25,000 Allowance was removed from its Base Bid pursuant to the ITB, i.e., that Nelco would perform the contract for $355,478.00 less $25,000.00, or $330,478.00, if the Department did not accept Alternate # 1 and the Allowance. (An alternate does not have to be accepted by the Department.) According to Mr. Renard, Mr. Cleveland never mentioned modifying, changing, or altering Nelco's bid. The Department only accepted the Base Bid for each bid. Mr. Renard did not consider it unusual to call a bidder or contractor to verify information to determine whether they can or cannot perform the work at the stipulated price. He considered it common to make this inquiry. Also, it was common in Mr. Bowman's experience to call a bidder to get clarification. Mr. Renard was not aware of any statute or rule which authorizes the Department to request clarification from a bidder after the bids are opened. Mr. Renard was more familiar with the bid forms than Mr. Allen. After receiving Mr. Cleveland's letter, the Department determined that Nelco submitted the lowest Base Bid and that the $25,000.00 amount that Nelco wrote on the Bid Form Alternate # 1 line, was a minor irregularity in the bid which the Department, as the Owner, could waive pursuant to the ITB. On December 20, 2001, the Department posted the Tabulation of Bids showing the anticipated award of the contract to Nelco. At the hearing, an unsigned letter on Department letterhead was introduced, which was addressed to Nelco and stated that Nelco submitted the apparent low bid. However, Mr. Renard testified that these letters are prepared routinely, but not mailed out without his signature. Mr. Renard did not recall signing the letter or ever sending out such a letter to Nelco. On December 21, 2001, the Department received a Notice of Intent to Protest letter from Allen E. Stine, the President of All America. In his letter, Mr. Stine stated that Nelco’s bid should have been rejected for failure to follow the specified format as per Addendum No. 1, or adjusted to have the $25,000.00 amount added to their Base Bid. Bid Protests All America filed a written formal bid protest on January 4, 2001. On January 9, 2001, Cindy Otero of All America, notified Mr. Renard by letter, and stated that Mr. Stine was available for a hearing regarding the bid protest. On January 28, 2002, Mr. Renard returned All America's check for the bond, stating that it was unnecessary. Mr. Stine recounted a number of unanswered telephone calls after the first protest was filed. During one conversation, Mr. Renard recalled Mr. Stine saying to him, "You can't do this, you can't do this." After receiving the first formal protest, the Department staff consulted with legal staff and reviewed the documents and bid procedures. Based on the number of questions received concerning the Addendum and the hand-written notes on several of the bid forms, Mr. Bowman, Bureau Chief, determined that the bid documents were confusing and ambiguous. (Mr. Bowman stated that this was their first bid protest in his 15 years with the Department.) Therefore, Mr. Bowman decided that it would in the best interest of the State of Florida to reject all of the bids pursuant to the Bid Specifications. Mr. Bowman felt that the ITB should be re-written in order to make it clearer and allowing all of the bidders to re-bid the project without any confusion or ambiguity. Mr. Stine stated that his "senior estimator" told him that the bid language "could be confusing." He and his "senior estimator" had a discussion about whether the Allowance should have been placed in the Base Bid or not. At the time of submission of All America's bid, Mr. Stine was clear that the Allowance should be placed in the Base Bid, especially after calling Mr. Allen. But, his senior estimator was not so clear. In order to appease him, Mr. Stine placed the hand-written note on All America’s proposal. Mr. Stine essentially, "cleaned" up his proposal. At the hearing, Mr. Bowman testified Rule 60D-5.0071, Florida Administrative Code, see Conclusion of Law 59, does not list "confusing or ambiguous bid specifications" as one of the circumstances allowing for the rejection of all bids. However, Mr. Bowman later stated during the hearing that he believed the circumstances listed in Rule 60D-5.0071 were not the only circumstances authorizing the Department to reject all bids. Mr. Bowman testified that he believed that general confusion among the bidders caused by the ambiguous ITB constituted sufficient grounds for rejecting all bids. Mr. Bowman was advised by legal counsel that rejecting all of the bids would probably result in another bid protest by Nelco, All America, or both. Thus, the Department decided to delay addressing All American’s first protest until after posting the rejection of all bids and receiving the subsequent protests, so that all of the protests could be resolved at once in an efficient and economical manner. Notwithstanding the Department's justifications for rejecting all bids and not proceeding on All America's initial protest, the record is unclear why the Department waited several months to reject all bids. On May 13, 2002, the Department posted the rejection of all bids. On May 16, 2002, the Department received a formal written protest of the rejection of all bids filed by All America. On May 17, 2002, Jerome I. Johnson, attorney for the Department, contacted Mr. Robert A. Lash, All America's counsel at the time, concerning the resolution of All America’s formal protest. (Before the final hearing, Mr. Lash, with All America's consent, withdrew as counsel for All America.) The parties agreed to suspend formal bid protest procedures until a meeting could be held between the parties in an attempt to resolve the protests. Mr. Johnson sent a letter dated May 21, 2002, to Mr. Lash confirming this conversation. On June 26, 2002, a meeting was held among the Department staff, legal staff, and Mr. Lash and Mr. Stine, representing All America. The parties were unable to resolve the protests. At the conclusion of the meeting, the parties agreed that formal protest procedures would not be implemented until Mr. Stine could confer further with his counsel. In a letter dated July 5, 2002, Mr. Lash stated that his client wished to proceed with formal protest procedures and requested an administrative hearing on the protests. Are the Specifications and Bid Documents Ambiguous and Was There Confusion? The parties stipulated that "[t]he Addendum language was confusing," notwithstanding the testimony of several witnesses that they were not confused. The Department's determination that the bid Specifications, including the Addendum, and the Bid Form, which remained unchanged after the Addendum was issued, were confusing and ambiguous, is supported by the weight of the evidence. This is particularly true regarding the Bid Form. The Addendum required the bidder to include an Allowance of $25,000.00 in the Base Bid for work described as Alternate # 1. But the Bid Form was unchanged to reflect the Addendum changes. The Bid Form retained a line for the bidder to submit an additional amount for Alternate # 1. Further, it appears that several bidders were confused, including, Mr. Stine, who spoke with Mr. Allen and requested and received clarification. Further, it is unclear whether all of the bidders, including Nelco, were aware of the oral interpretations or clarifications of the Addendum rendered to some of the bidders. Rejection of All Bids Based upon the foregoing, given the standard of review in this proceeding discussed in the Conclusions of Law, the weight of the evidence indicates that the Department's action, in rejecting all bids, was not illegal, arbitrary, dishonest, or fraudulent. The Department's staff was well-intended and made some mistakes along the way, e.g., by not changing the Bid Form, which they readily admit. But there was a rationale for rejecting all bids under the circumstances.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department issue a final order dismissing All America’s Petition to Prevent Rejection of Bids and Award Contract to Petitioner and denying All America's request for attorney’s fees and costs. DONE AND ENTERED this 24th day of September 2002, in Tallahassee, Leon County, Florida. CHARLES A. STAMPELOS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of September 2002.
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules, or policies or the bid specifications in its proposed decision to award Contract No. T7380 to Astaldi Construction Corporation ("Astaldi").
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, and on the entire record of the proceeding, the following Findings of Fact are made: The Department is a state agency authorized by section 337.11 to contract for the construction and maintenance of roads within the State Highway System, the State Park Road System, and roads placed under its supervision by law. The Department is specifically authorized to award contracts under section 337.11(4) to “the lowest responsible bidder.” On April 15, 2016, the Department advertised a bid solicitation for Contract T7380, seeking contractors for the widening of a 3.8 mile portion of U.S. Highway 301 in Hillsborough County from two lanes to six lanes between State Road 674 and County Road 672 and over Big Bull Frog Creek. The advertisement provided a specification package for the project and the “Standard Specifications for Road and Bridge Construction” (“Standard Specifications”) used on Department roadway projects. The work included seven components: bridge structures (Section 0001), roadway (Section 0002), signage (Section 0003), lighting (Section 0004), signalization (Section 0005), utilities (Section 0006), and intelligent transportation systems (Section 0007). The advertisement identified 666 individual items of work to be performed and quantity units for each item. The project was advertised as a low-bid contract with a budget estimate of $51,702,729. The Department’s bid proposal form contains five columns with the following headings: Line Number; Item Number and Item Description; Approximate Quantities and Units; Unit Price; and Bid Amount. The bid proposal form contains line items for the seven components of the project. The utilities component contains 42 line items, each with an Item Number and Item Description. For example, Line Number 1410 corresponds with the following Item Number and Item Description: “1050 11225 Utility Pipe, F&I, PVC, Water/Sewer, 20–40.9 [inches].” Each bidder inserts a Unit Price for the line item in the corresponding “Unit Price” column. The “Bid Amount” column for each line item is an amount generated by multiplying a bidder’s Unit Price by the Quantities (determined by the Department) for each Line Number. The Bid Amount for each Line Number is then added together to generate the “Total Bid Amount” representing the bid for the entire project. Astaldi, Prince, Hubbard, and other potential bidders attended the mandatory pre-bid meeting. Prequalified contractors were given proposal documents that allowed them to enter bids through Bid Express, the electronic bidding system used by the Department. Plan revisions were issued by addenda dated May 10, 2016, and June 7, 2016. A Question and Answer Report was published and updated as inquiries were addressed. Bids were opened on the letting date of June 15, 2016. Bids for Contract T7380 were received from Astaldi, Prince, Hubbard, the DeMoya Group (“DeMoya”), Ajax Paving Industries of Florida, LLC (“Ajax”), and Cone & Graham, Inc. (“Cone & Graham”). The bids were reviewed by the Department’s contracts administration office to ensure they were timely, included a Unit Price for each line item, and contained the completed certifications required by the specifications. Bidders were checked against the Department’s list of prequalified bidders to confirm they possessed a certification of qualification in the particular work classes identified by the bid solicitation. Each bidder’s total current work under contract with the Department was examined to ensure that award of Contract T7380 would not place the bidder over its Department-designated financial capacity limit. Astaldi submitted the lowest bid, a total amount of $48,960,013. Prince submitted the next lowest bid, a total amount of $57,792,043. Hubbard’s total bid was the third lowest at $58,572,352.66. The remaining bidders came in as follows: DeMoya, $63,511,686.16; Ajax, $68,617,978.10; and Cone & Graham, $70,383,697.74. All bidders were prequalified in the appropriate work classes and had sufficient financial capacity, in accordance with section 337.14 and Florida Administrative Code Chapter 14-22. The Department’s construction procurement procedure, from authorization to advertisement through contract execution, is outlined in the Department’s “Road and Bridge Contract Procurement” document (“Contract Procurement Procedure”). The scope statement of the Contract Procurement Procedure provides: “This procedure applies to all Contracts Administration Offices responsible for advertising, letting, awarding, and executing low bid, design-bid-build, construction, and maintenance contracts.” Limited exceptions to the procedure may be made if approved by the assistant secretary for Engineering and Operations. If federal funds are included, the Federal Highway Administration division administrator, or designee, must also approve any exceptions from the procedure. The stated objectives of the Contract Procurement Procedure are: “to standardize and clarify procedures for administering low-bid, design-bid-build, construction, and maintenance contracts” and “to provide program flexibility and more rapid response time in meeting public needs.” The Department’s process for review of bids is set forth in the “Preparation of the Authorization/Official Construction Cost Estimate and Contract Bid Review Package” (“Bid Review Procedure”). The scope statement of the Bid Review Procedure states: This procedure describes the responsibilities and activities of the District and Central Estimates Offices in preparing the authorization and official construction cost estimates and bid review packages from proposal development through the bid review process. Individuals affected by this procedure include Central and District personnel involved with estimates, specifications, design, construction, contracts administration, work program, production management, federal aid, and the District Directors of Transportation Development. The Bid Review Procedure contains a definitions section that defines several terms employed by the Department to determine whether a bid or a unit item within a bid is “unbalanced.” Those terms and their definitions are as follows: Materially Unbalanced: A bid that generates reasonable doubt that award to that bidder would result in the lowest ultimate cost or, a switch in low bidder due to a quantity error. Mathematically Unbalanced: A unit price or lump sum bid that does not reflect a reasonable cost for the respective pay item, as determined by the department’s mathematically unbalanced bid algorithm. Official Estimate: Department’s official construction cost estimate used for evaluating bids received on a proposal. Significantly Unbalanced: A mathematically unbalanced bid that is 75% lower than the statistical average. Statistical Average: For a given pay item, the sum of all bids for that item plus the Department’s Official Estimate which are then divided by the total number of bids plus one. This average does not include statistical outliers as determined by the department’s unit price algorithm. For every road and construction project procurement, the Department prepares an “official estimate,” which is not necessarily the same number as the “budget estimate” found in the public bid solicitation. The Department keeps the official estimate confidential pursuant to section 337.168(1), which provides: A document or electronic file revealing the official cost estimate of the department of a project is confidential and exempt from the provisions of s. 119.07(1) until the contract for the project has been executed or until the project is no longer under active consideration. In accordance with the Bid Review Procedure, the six bids for Contract T7380 were uploaded into a Department computer system along with the Department’s official estimate. A confidential algorithm identified outlier bids that were significantly outside the average (such as penny bids) and removed them to create a “statistical average” for each pay item. Astaldi’s unit pricing was then compared to the statistical average for each item. The computer program then created an “Unbalanced Item Report,” flagging Astaldi’s “mathematically unbalanced” items, i.e., those that were above or below a confidential tolerance value from the statistical average. The unbalanced item report was then reviewed by the district design engineer for possible quantity errors. No quantity errors were found.1/ The Department then used the Unbalanced Item Report and its computer software to cull the work items down to those for which Astaldi’s unit price was 75 percent more than or below the statistical average. The Department sent Astaldi a form titled “Notice to Contractor,” which provided as follows: The Florida Department of Transportation (FDOT) has reviewed your proposal and discovered that there are bid unit prices that are mathematically unbalanced. The purpose of this notice is to inform you of the unbalanced nature of your proposal. You may not modify or amend your proposal. The explanation of the bid unit prices in your proposal set forth below was provided by ASTALDI CONSTRUCTION CORPORATION on ( ) INSERT DATE. FDOT does not guarantee advanced approval of: Alternate Traffic Control Plans (TCP), if permitted by the contract documents; Alternative means and methods of construction; Cost savings initiatives (CSI), if permitted by the contract documents. You must comply with all contractual requirements for submittals of alternative TCP, means and methods of construction, and CSI, and FDOT reserves the right to review such submittals on their merits. As provided in section 5-4 of the Standard Specifications for Road and Bridge Construction you cannot take advantage of any apparent error or omission in the plans or specifications, but will immediately notify the Engineer of such discovery. Please acknowledge receipt of this notice and confirmation of the unit bid price for the item(s) listed below by signing and returning this document. Section 5.4 of the Bid Review Procedure describes the Notice to Contractor and states: “Contracts are not considered for award until this form has been signed and successfully returned to the Department per the instruction on the form.” State estimating engineer Greg Davis testified that the stated procedure was no longer accurate and “need[s] to be corrected” for the following reason: Since the procedure was approved back in 2011, we’ve had some subsequent conversations about whether to just automatically not consider the award for those that are not signed. And since then we have decided to go ahead and just consider the contract, but we are presenting a notice, of course, unsigned and then let the technical review and contract awards committee determine. Astaldi signed and returned the Notice to Contractor and noted below each of the ten listed items: “Astaldi Construction confirms the unit price.” Mr. Davis explained that the purpose of the Notice to Contractor form is to notify the contractor that items have been identified as extremely low and to ask the contractor to confirm its understanding that in accepting the bid, the Department will not necessarily approve design changes, methods of construction, or maintenance of traffic changes. Section 6.6 of the Contract Procurement Procedure sets forth the circumstances under which an apparent low bid must be considered by the Department’s Technical Review Committee (“TRC”) and then by the Contract Awards Committee (“CAC”). Those circumstances include: single bid contracts; re-let contracts; “significantly mathematical unbalanced” bids; bids that are more than 25 percent below the Department’s estimate; 10 percent above the Department’s estimate (or 15 percent above if the estimate is under $500,000); materially unbalanced bids, irregular bids (not prepared in accordance with the Standard Specifications); other bid irregularities2/; or “[a]ny other reason deemed necessary by the chairperson.”3/ Bids that are not required to go before the TRC and CAC are referred to as “automatic qualifiers.” Because it was mathematically unbalanced, the Astaldi bid was submitted to the TRC for review at its June 28, 2016, meeting. The TRC is chaired by the Department’s contracts administration manager, Alan Autry, and is guided by a document entitled “Technical Review Committees” (“TRC Procedure”). The TRC Procedure sets forth the responsibilities of the TRC in reviewing bid analyses and making recommendations to the CAC to award or reject bids. The TRC voted to recommend awarding Contract T7380 to Astaldi. The TRC’s recommendation and supporting paperwork was referred to the CAC for its meeting on June 29, 2016. The duties of the CAC are described in a document entitled “Contracts Award Committees” (“CAC Procedure”). Pursuant to the CAC Procedure, the CAC meets approximately 14 days after a letting to assess the recommendations made by the TRC and determines by majority vote an official decision to award or reject bids. Minutes for the June 29, 2016, CAC meeting reflect 21 items before the committee including: two single bid contracts; four bids that were 10 percent or more above the official estimate; one bid that was 15 percent or more above the official estimate on a project under $500,000; three bids that were more than 25 percent below the official estimate; and 11 bids with significantly unbalanced items, including Contract T7380 with an intended awardee of Astaldi. The CAC voted to award Contract T7380 based on the low bid submitted by Astaldi. A Notice of Intent to award the contract to Astaldi was posted on June 29, 2016. As noted at Finding of Fact 2, supra, Contract T7380 consisted of seven components: structures, roadway, signage, lighting, signalization, utilities, and intelligent transportation system. The Department does not compare bids by component, but looks at the total bid amount to find the lowest bidder. The Department also reviews the bids for discrepancies in individual unit items using the process described above. Astaldi’s bid of $48,960,013 was approximately $8.8 million below Prince’s bid of $57,792,043, $9.6 million less than Hubbard’s bid of $58,572,352, and $2.7 million below the Department’s public proposal budget estimate of $51,702,729. As part of its challenge to the intended award, Prince performed a breakdown of bids by individual components and discovered that nearly all of the differences between its bid and Astaldi’s could be attributed to the utilities component. Astaldi’s bid for the utilities component was $7,811,720, which was roughly $8.5 million below Prince’s utilities bid of $16,305,903 and $5.8 million below Hubbard’s utilities bid of $13,603,846.4/ The utilities component was included pursuant to an agreement between the Department and Hillsborough County, the owner of the water and sewer lines, relating to the improvement of water and sewer lines along the roadway limits of the project. The utility work consists of installing a new water- line and force main sewer. The existing water main and the existing force main conflict with the proposed location of the new storm drainage system. The new water main and force main must be installed, tested, and approved before being put into active service. To prevent water utility outages to customers, the new system must be installed and approved before the existing waterline and existing force main can be cut off and removed. Utility work is therefore the first task to be performed on Contract T7380. Once the utility component is completed, the contractor will furnish and install the stormwater system, the roadway, the bridgework, and all other components. Article 3-1 of the Standard Specifications5/ reserves to the Department the right to delete the utility relocation work from the contract and allow the utility owner to relocate the utilities. Utilities are the only portion of a Department contract subject to deletion because the funding is provided by the utility owner, which usually has allocated a certain dollar figure to contribute towards the contract prior to the bidding. If the bid for utilities comes in over the utility owner’s budget, the owner can opt out of the contract and self-perform. In this case, Hillsborough County had contracted with the Department to contribute $8.9 million for utility relocation work. The Department did not exercise the option to delete the utilities portion of the contract. Jack Calandros, Prince’s chief executive, testified that Prince uses a computer program called HeavyBid, created and supported by a company called HCSS, to build the cost components of its bids. Every witness with industry knowledge agreed that HeavyBid is the standard program for compiling bids in the construction field. Mr. Calandros testified that cost components include material quotes provided by third-party vendors and quotes from potential subcontractors. Labor and equipment costs are ascertained by using historical rates and actual cost estimates that are tracked by the HeavyBid software. Prince maintains its own database of costs derived from 20 years’ experience. Mr. Calandros stated that Prince’s internal labor and equipment rates are checked and adjusted at least once a year to ensure they are current and accurate based on existing equipment and personnel. Prince received three vendor quotes for the materials to perform the utility work on Contract T7380. In compiling its bid, Prince ultimately relied on a final quote from Ferguson Waterworks (“Ferguson”) of $8,849,850. Based on this materials quote and Prince’s overall utilities bid of $16,305,903, Mr. Calandros opined that it would not be possible for Astaldi to perform the utilities component for its bid amount of $7.8 million. Prince’s estimating expert, John Armeni, reviewed Astaldi’s bid file, read the deposition testimony of Astaldi’s chief estimator, Ed Thornton, and spoke to Mr. Thornton by telephone. Mr. Armeni also reviewed Prince’s bid and the bid tabulation of all bidders’ utilities component line items. Based on his review and his extensive experience in the industry, Mr. Armeni concluded that Astaldi’s bid does not include all costs for labor, material, and equipment necessary to construct the utilities portion of this project. Mr. Armeni reviewed the materials quote from Ferguson that Prince used in its bid. He noted that Astaldi’s bid file contained an identical quote from Ferguson of $8.8 million for materials, including some non-utilities materials. Mr. Armeni noted that the Ferguson quote for utilities materials alone was approximately $8 million, an amount exceeding Astaldi’s entire bid for the utilities portion of the project. Mr. Armeni also noted that Astaldi’s overall bid was 18 percent below that of the second lowest bidder, Prince. He testified that 18 percent is an extraordinary spread on a bid where the Department is providing the quantities and all bidders are working off the same drawings and specifications. Mr. Armeni believed that the contracting authority “should start looking at it” when the difference between the lowest and second lowest bidder is more than 10 percent. In his deposition, Mr. Thornton testified he was not aware of how Astaldi arrived at its bid prices for the utility section of the project. Mr. Thornton indicated multiple times that he was not Astaldi’s most knowledgeable person regarding the bid submitted by Astaldi on Contract T7380 project. He testified that Astaldi intended to subcontract the utilities work and acknowledged that the company received a subcontractor quote of $14.9 million after the bids were submitted. Mr. Thornton did not know if Astaldi had solicited the quote. He said it is not unusual for a company to receive subcontractor bids after it has been named the low bidder on a project. Mr. Thornton conceded that Astaldi’s bid did not include all the costs necessary to construct the utilities portion of Contract T7380. At his deposition, he did not have before him the materials needed to determine which items of cost Astaldi had omitted. Mr. Thornton testified that Astaldi was not missing any information it needed at the time of bid submission and understood that its price was to include all labor, materials, and subcontracting costs to perform the contract. After the proposed bid award, Astaldi used HeavyBid to produce a report indicating that the company now estimates its cost of performing the contract at $53,708,129.03, or roughly $4.75 million more than its winning bid. Mr. Thornton testified that Astaldi nonetheless stood ready to execute the contract and perform the work at its bid price. Central to the dispute in this case is Standard Specifications Section 9, “Measurement and Payment,” article 9-2 of which is titled “Scope of Payments.” In particular, subarticle 9-2.1 provides: 9-2.1 Items Included in Payment: Accept the compensation as provided in the Contract as full payment for furnishing all materials and for performing all work contemplated and embraced under the Contract; also for all loss or damage arising out of the nature of the work or from the action of the elements, or from any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the work until its final acceptance; also for all other costs incurred under the provisions of Division I. For any item of work contained in the proposal, except as might be specifically provided otherwise in the payment clause for the item, include in the Contract unit price (or lump sum price) for the pay item or items the cost of all labor, equipment, materials, tools and incidentals required for the complete item of work, including all requirements of the Section specifying such item of work, except as specially excluded from such payments. Prince contends that the second paragraph of subarticle 9-2.1 renders Astaldi’s bid nonresponsive because Astaldi admittedly failed to include “the cost of all labor, equipment, materials, tools and incidentals” in its bid. Prince points out that the “Technical Special Provisions” governing the utilities portion of the project reinforce the requirement that each bidder include all costs for the work. Technical Special Provisions Section 1-7.1 provides that “[p]ipe installation cost shall include all necessary work, equipment, and labor needed for installing the pipe, such as, coordination with existing utilities and support during construction and support of existing power poles during construction.” Technical Special Provisions Section 1-8.1 goes on to say that “[n]o separate payment will be made for the following items for work under this Technical Special Provision and the cost of such work shall be included in the applicable contract pay items of work,” followed by a comprehensive list of 30 items. Prince concludes that the requirement that each bidder include all costs, including costs of all necessary labor, equipment, and materials, in the Unit Price for each work item is “manifest” in the bid specifications and requires rejection of any bid that does not include all costs. Mr. Armeni opined that if one bidder excludes a portion of its costs, the other bidders are placed at a competitive disadvantage. Alan Autry, the Department’s central contracts administration manager, testified that five other projects were let as part of the bid package that included Contract T7380. He stated that it is typical for the Department to list multiple projects on one day. Mr. Autry’s office usually performs one bid letting per month, with the holiday months of November and December rolled together in a single letting. Mr. Autry stated that his office lets between 200 and 300 projects per year, not counting contracts that are let at the district level. Twenty other contracts were before the CAC at the June 29, 2016, meeting at which the Astaldi award in this case was approved. As noted at Finding of Fact 2, supra, Contract T7380 included 666 line items. Six companies submitted bids, meaning there were a total of 3,996 line items in this single contract. Assuming that the 200 to 300 other projects let by the Department’s Tallahassee office contain similar numbers, there are more than one million line items bid in any given year. If Prince’s reading of the bid specifications is correct, the Department is required to examine each of these line items and somehow make a determination whether the item includes all of the bidder’s costs. This problem of determining bidder cost is complicated by the presence of “companion” or “sister” items in bids, i.e., two items that must be considered in tandem to arrive at something like the actual cost of the work. Prince provided an example of such companion items in its analysis of the bids in this project. Two bid items included in the structures section of the bid proposal form were concrete culverts and reinforcing steel. The contractor may cast the culverts in place at the worksite or purchase them precast. If the concrete culvert is cast in place at the worksite, then reinforcing steel must be used to strengthen the culvert. If the concrete culvert is precast by a materials supplier, then the reinforcing steel has already been incorporated into the culvert at the time of installation. Mr. Calandros explained that when a contractor uses precast culverts, there is no need to list a separate additional cost for reinforcing steel; all costs are captured in the line item for concrete culverts. In this bid, Prince used precast culverts and therefore bid a penny per unit for reinforcing steel.6/ Bidders who cast the culverts in place showed a much higher cost for reinforcing steel but a lower cost for the concrete culverts. When the “companion items” were considered in tandem, the total cost for each vendor was fairly consistent. Prince’s explanation for companion items was coherent but did not explain how the Department is supposed to know which items are companion items as it undertakes the line-by-line cost examination of each bid in accordance with Prince’s reading of the bid specifications. Prince also failed to provide an explanation as to how the Department is to determine a bidder’s costs for any one line item or, for that matter, for its overall bid on a project. Bidders consider their cost information and the processes by which they build bids to be confidential proprietary information. In the instant case, Prince disclosed its own information (aside from materials costs) only under seal during litigation. In its ordinary course of business, the Department does not have access to this information. In fact, as noted at Finding of Fact 23, supra, the Department does not compare bids by component. It looks only at the total bid amount in determining the lowest bidder. Standard Specifications Article 3-8 reserves to the Department the right to perform an audit of the contractor’s records pertaining to the project upon execution of the contract. No authorization is provided to audit records of bidders prior to contracting. Standard Specifications Subarticle 2-5.1 allows bidders to indicate “free” or “$.00” for items that will be supplied at no cost to the Department. Though the Department’s practice, according to Mr. Autry, is to include zero bid items on the Notice to Contractor for confirmation of the price, subarticle 2-5.1 requires no Department investigation as to whether the bidder’s cost for a zero bid is actually zero. Bidders often bid a penny on items, as Prince did on reinforcing steel in this case. Standard Specifications Article 3-5 requires all contracts to be secured by a surety bond such that, in the event of a default by the contractor, the surety company will indemnify the Department on all claims and performance issues. Standard Specifications Section 4 provides that the scope of work is to be determined within the contract, including the furnishing of all labor, materials, equipment, tools, transportation, and supplies required to complete the work. The Department is authorized to make changes to the scope of work and make equitable adjustments of payments. If necessary, the Department may enter into supplemental agreements for additional or unforeseen work. Prince cautions that these change provisions could become relevant because Astaldi’s bid contains no information explaining how Astaldi will cover the $4.75 million difference between its bid price and its actual cost to perform the contract. Prince accurately states that nothing in Astaldi’s bid demonstrates that it has cash reserves to cover the loss and still complete the entire scope of the work.7/ Prince contends that this lack of demonstrable reserves renders Astaldi nonresponsible as to this project. Prince argues that it is error for the Department to rely on Astaldi’s certificate of qualification as proof of the company’s responsibility. The certificate of qualification process considers a contractor’s financial status at the time it submits its financial statements and other information regarding company resources. Prince contends that the Department’s assessment of the contractor’s financial statements and issuance of a certificate of qualification is insufficient to determine the contractor’s responsibility on a given bid. Prince argues that the Department is required by its governing statutes and the Standard Specifications to award a particular contract to the particular bidder that is the lowest, responsive, and responsible bidder, and that “responsible” for a given project is not synonymous with “prequalified.” Prince hypothesizes that under the Department’s practice, a bidder could possess a certificate of qualification issued in January, be indicted in another state for fraud and bribery in February, submit the lowest bid for a Department project in March, and be awarded the contract. By relying solely on the bidder’s certificate of qualification to determine responsibility, the Department could award a contract to a nonresponsible bidder. Section 337.14 provides that any person desiring to bid on any construction contract in excess of $250,000 must first be certified by the Department. Mr. Autry explained that the Department prequalifies contractors to submit bids on certain types of contract, such as major bridges and structures. Contractors applying for certification are required to submit their latest annual financial statements. The Department is charged with reviewing applications to determine “whether the applicant is competent, is responsible, and possesses the necessary financial resources to perform the desired work.” § 337.14(3), Fla. Stat. The Department assigns the contractor work classes and a total capacity after evaluating its experience and financials. The Department’s certificate is good for 18 months, though the contractor’s capacity is reviewed annually. At the time of a particular bid, the Department verifies the contractor’s available capacity, which is simply its total assigned capacity minus current work the contractor is performing for the Department. Mr. Autry testified that the Department does not go back and look at a bidder’s financials to determine whether it can sustain a loss on a given project. The Department does not repeat its capacity analysis during the year, regardless of how many projects the company bids on. The Department’s analysis is limited to whether the company’s current capacity is sufficient for the project on which it is bidding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Transportation enter a final order dismissing Prince Contracting, LLC’s, second amended formal written protest and awarding Contract T7380 to Astaldi Construction Corporation. DONE AND ENTERED this 22nd day of December, 2016, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 2016.
The Issue The Department of Corrections sought bids for construction of a health services building for a correctional facility. A discrepancy existed between the written specifications and the architectural drawings for the project. An addendum was issued to clarify the matter. The low bidder (Intervenor) did not acknowledge receipt of the addendum until several hours after the opening of bids. The Department accepted the Intervenor's bid. The Petitioner timely protested the action. The issue in this case is whether, in accepting the Intervenor's bid, the Department acted contrary to the requirements of law.
Findings Of Fact On July 31, 1990, the Department of Corrections (hereinafter "Department") issued an Invitation To Bid ("ITB") for PR-35-JRA, Project #90015, consisting of the construction of a Health Classification Building at the Columbia County Correctional Institution. In relevant part, the ITB requested price proposals for said construction, provided that the bid would be awarded to the responsive bidder submitting the lowest cost proposal, provided that "in the interest" of the Department, "any informality" in bids could be waived, and provided space on the bid form for acknowledgment of receipt of all addenda to the ITB. Bids were to be filed no later than 2:00 p.m. on September 11, 1990, the time scheduled for bid opening. Documents issued with the ITB included architectural drawings and written specifications for the building. The architectural firm of Jim Roberson and Associates, (hereinafter "JRA") had been employed by the Department to prepare the drawings and specifications. JRA was responsible for preparation and distribution of related addenda. Further, a JRA representative presided over the opening of bids on behalf of the Department. Following release of the ITB and supporting documents, JRA became aware of a conflict between sink faucets required by the drawings and those required by the written specifications. The specifications provided that sink faucets operated by hand levers or foot pedals were to be installed in the facility. The architectural drawings JRA indicated that sink faucets were to operate by means of "electric-eye" activators, rather than by hand levers or foot pedals. On September 10, 1990, JRA issued an addendum (identified as Addendum #2) 1/ to clarify that "electric-eye" type operators were to be included in the bids. The addendum was sent by telephone facsimile machine to all anticipated bidders. In part the addendum provides as follows: "This Addendum forms a part of the Contract Documents and modifies the original Specifications and Drawings, dated 31 July 1990, as noted below. Acknowledge receipt of this Addendum in the space provided on the Bid Form. Failure to do so may subject the Bidder to Disqualification." On September 11, 1990, the eight bids submitted in response to the ITB were opened by the JRA representative. The Intervenor, Custom Construction (hereinafter "Custom"), submitted the lowest bid at $898,898. The Petitioner, David Nixon (hereinafter "Nixon"), submitted the next lowest bid at $900,000. The bid form provided by the Department as part of the ITB materials to prospective bidders provided space for acknowledgment of addenda to the ITB documents. Upon opening the bid submitted by Custom, the JRA representative officiating at the opening noted that the Custom bid failed to acknowledge Addendum #2 in the appropriate space on the bid form. 2/ Robert L. Harris, president of Custom Construction, attended the bid opening. When the JRA representative noted the lack of acknowledgment of Addendum #2, Mr. Harris stated that he was unaware of the addendum. At hearing, Mr. Harris testified that his secretary told him that Addendum #2 was not received by his office. The JRA representative testified that his review of JRA's FAX transmission records indicated that the FAXed Addendum #2 was received by all bidders. The greater weight of the evidence establishes that Addendum #2 was transmitted to and received by, all bidders. Upon leaving the bid opening, Mr. Harris immediately contacted his plumbing subcontractor, Jerry Stratyon, and discussed the situation. Approximately two hours after the bid opening, and after talking with Mr. Stratton, Mr. Harris notified JRA, in a letter transmitted by FAX machine to JRA, that his bid price did include plumbing fixtures required by Addendum #2. Mr. Harris concluded the letter, "[w]hen can we start work. I know you don't want the alternate." On October 8, 1990, JRA recommended to the Department, that the Custom bid be accepted. The letter of recommendation, in part, provides: The apparent low bidder however, did not verify receipt of Addendum No. 2 on the Bid Proposal. Our office did receive a, facsimile after the bid verifying Addendum NO. 2 receipt from the Contractor's Office." However, the actual letter from Custom to JRA states, not that Addendum #2 was received, but that it was included in the price bid by Custom's plumbing subcontractor. Both Nixon and Custom obtained plumbing bids from the same subcontractor, Jerry Stratton. The cost increase attendant to the requirements of Addendum #2 is approximately $2,400 over the plumbing fixtures indicated in the written project specifications. Mr. Stratton was aware of Addendum #2 and testified that the requirements of Addendum #2 were reflected in his price quotes to both bidders. Mr. Stratton provided the same price bid to Nixon and Custom. Mr. Stratton also provided bids to Nixon and Custom for HVAC work. Mr. Stratton was accepted as Custom's HVAC subcontractor. Nixon's bid indicates that another HVAC subcontractor will perform the cork should Nixon receive the contract. The ITB provided that bid modification or withdrawal was permitted on written or telegraphic request received from a bidder prior to the time fixed for opening. Mr. Harris did not attempt to either withdraw or modify Custom's bid prior to bid opening. No bid modification was permitted subsequent to the bid opening. The Department's policy is to waive minor irregularities when to do so would be in the best interests of the State and would not be unfair to other bidders. The evidence does not establish that Custom Construction's failure to acknowledge the addendum was purposefully designed to permit withdrawal of their bid subsequent to the public bid opening. The omission of acknowledgment of Addendum #2 provided Custom an opportunity to withdraw the bid that was not available to other bidders. Custom could have informed the Department that the bid price did not include the requirements of Addendum #2, and the bid could have been withdrawn. Custom was therefore provided with a substantial advantage or benefit not enjoyed by the other bidders. The other bidders, all of whom acknowledged receipt of Addendum #2, had no opportunity to, and would not have been permitted to, withdraw their aids. The fact that Custom did not withdraw the bid is irrelevant.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Corrections enter a Final Order rejecting the bid submitted by Intervenor as nonresponsive and awarding the contract to the Petitioner. DONE and RECOMMENDED this 15th day of January, 1991, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of January, 1991.
The Issue The issue for determination is whether Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in selecting Intervenor as the lowest bidder for a contract to supply the state with lamps valued at $3,692,499.
Findings Of Fact The Parties Respondent is the state agency responsible for soliciting bids to establish a contract for the purchase of large lamps by state agencies and other eligible users. Petitioner is a Florida corporation and the incumbent vendor under similar contracts for the preceding 10 years. Petitioner does not manufacture lamps. Petitioner sells lamps manufactured by Osram-Sylvania ("Sylvania"). Intervenor is an Ohio corporation doing business in Florida. Intervenor manufactures the lamps it sells. The ITB On March 15, 1996, Respondent issued Invitation To Bid Number 39-285- 400-H, Lamps, Large, Photo and STTV (the "ITB"). The purpose of the ITB is to establish a 24 month contract for the purchase of Large Lamps (fluorescent, incandescent, etc.), Photo Lamps (audio visual, projection, flash), and Studio, Theatre, Television, and Video Lamps ("STTV") by state agencies and other eligible users. The contract runs from July 10, 1996, through July 9, 1998. The ITB estimates the contract price at $3,692,499. The ITB contains General and Special Conditions. General Conditions are set forth in 30 numbered paragraphs and elsewhere in DMS Form PUR 7027. Special Conditions are set forth in various unnumbered paragraphs in the ITB. General Conditions Paragraphs 5, 11, and 24 of the General Conditions are at issue in this proceeding. The terms of each paragraph are: 5. ADDITIONAL TERMS AND CONDITIONS: No additional terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and conditions shall have no force and effect and are inapplicable to this bid. If submitted either purposely through intent or design or inadvertently appearing separately in transmittal letters, specifications, literature, price lists, or warranties, it is understood and agreed the general and special conditions in this bid solicitation are the only conditions applicable to this bid and the bidder's authorized signature affixed to the bidder's acknowledgment form attests to this. 11. QUALITY ASSURANCE: The contractor, during the contract term, upon mutual agree- ment with the Division of Purchasing, will provide reasonable travel and lodging accommodations for one (1) to three (3) government employees to perform an on-site inspection of the manufacturing process(es) and review of the manufacturer's product quality control(s) and total quality manage- ment program(s). The contractor will reim- burse the State for actual transportation cost, per diem and incidental expenses as provided in Section 112.061, F.S. It is the State's desire that the contractor provide demonstration of quality control for improvement rather than post production detection. 24. FACILITIES: The State reserves the right to inspect the bidder's facilities at any reasonable time with prior notice. Included Items Special Conditions in the ITB require bidders to submit prices for "Item 1" and "Item 2" lamps ("included items"). 1/ Item 1 lamps consist of Group 1 and 2 lamps. Group 1 lamps are Large Lamps such as fluorescent, incandescent, quartz, mercury vapor, metal halide, and high-pressure sodium lamps. Group 2 lamps are Photo Lamps such as audio visual, projection, flash, and STTV lamps. The total price for each group is multiplied by a weighted usage factor. The product calculated for Group 1 is added to the product calculated for Group 2 to determine the total price for Item 1 lamps. Item 2 consists of a category of lamps described as "T- 10 Lamps." The total price for Item 2 lamps is determined without application of the weighted usage factor used for Item 1 lamps. The total price for Item 2 lamps is a de minimis portion of the contract price. Special Conditions in the ITB require Respondent to award a single contract for included items to a single bidder. Special Conditions state that, "During the term of the contract established by this bid, all purchases of items will be made from the successful bidder." 2/ Excluded Items Special Conditions require that, "The bidder shall offer a fixed discount from retail prices on all excluded items." Excluded items include high technology lamps. The requirement for a fixed discount on excluded items is not considered in evaluating bid prices for included items. Rather, the requirement is intended to reduce the state's cost for both included and excluded items by assuring a meaningful discount on excluded items. Formatting Requirements Special Conditions prescribe the format in which bids must be submitted. Price lists and authorized dealers' lists are required to be submitted in hard copy and on computer diskette. The format prescribed for computer diskette includes requirements for font and graphics. The Special Conditions state that, "Failure to comply with this requirement will result in disqualification of your bid." The Bids The ITB prohibits the alteration of bids after they are opened. Respondent opened bids on April 10, 1996. Seven vendors submitted bids in response to the ITB. Included Items Four vendors, including Petitioner, submitted a bid for both Item 1 and Item 2 lamps. Intervenor and two other bidders did not submit a bid for Item 2 lamps. General Conditions Intervenor deleted paragraphs 11 and 24 of the General Conditions from its bid. At the direction of Intervenor's legal department in Cleveland, Ohio, Intervenor's regional sales manager struck through paragraphs 11 and 24 and initialed the deletions. The deletions are consistent with Intervenor's corporate policy. Intervenor routinely objects to contract provisions requiring inspection of Intervenor's facilities. Excluded Items Petitioner's bid includes a fixed discount of 44 percent on excluded items. Intervenor's bid includes a fixed discount of 0 percent. Formatting Requirements Intervenor included the information required by the ITB on the diskette it submitted with its bid. However, Intervenor supplied the information in Courier 12 characters per inch ("cpi") font, not the Courier 10 cpi font prescribed in the ITB. Proposed Agency Action Respondent determined that Intervenor's bid was responsive. The purchasing specialist for Respondent who reviewed each bid to determine if it was responsive failed to observe the deleted paragraphs in Intervenor's bid. The purchasing specialist forwarded those bids determined to be responsive to the purchasing analyst assigned by Respondent to: determine if the lamps offered in each bid met the specifications prescribed in the ITB; and evaluate bid prices. The purchasing analyst noted that paragraphs 11 and 24 were deleted from Intervenor's bid. The purchasing analyst and purchasing specialist conferred. They determined that paragraph 5 of the General Conditions cured Intervenor's deletions without further action. The purchasing analyst correctly determined: that lamps offered by Petitioner and Intervenor met ITB specifications; that Intervenor's bid is the lowest bid for Item 1 lamps; that Petitioner's bid is the second lowest such bid; and that Petitioner's bid is the lowest bid for Item 2 lamps. Petitioner's bid for Item 1 lamps is approximately five percent greater than Intervenor's bid. Respondent proposes to award one contract for Item 1 lamps to Intervenor. Respondent proposes to award a second contract for Item 2 lamps to Petitioner. At 4:00 p.m. on May 20, 1996, Respondent posted its intent to award the contract for Item 1 lamps to Intervenor. Petitioner timely filed its formal protest on June 3, 1996. Respondent did not award a contract for excluded items. Respondent's failure to award a contract for excluded items is not at issue in this proceeding. Arbitrary Respondent's proposed award of a contract to Intervenor for substantially all of the items included in the ITB is a decisive decision that Respondent made for reasons, and pursuant to procedures, not governed by any fixed rule or standard prescribed either in the ITB or outside the ITB. Respondent's proposed agency action is arbitrary. Excluded Items The requirement for bidders to offer a fixed discount on excluded items operates synergistically with the requirement for Respondent to award a single contract on included items to a single bidder. The combined action of the two requirements operating together has greater total effect than the effect that would be achieved by each requirement operating independently. The requirement for a fixed discount on excluded items, operating alone, may not induce a bidder who could receive a contract solely for Item 2 lamps to offer a discount that is as meaningful as the discount the bidder might offer if the bidder were assured of receiving a contract for Item 1 and 2 lamps upon selection as the lowest bidder. 3/ By assuring bidders that a single contract for Item 1 and 2 lamps will be awarded to a single bidder, the ITB creates an economic incentive for bidders to provide a meaningful discount on excluded items. Respondent frustrated the synergy intended by the ITB by applying the requirements for a fixed discount and for a single contract independently. Respondent penalized the bidder conforming to the requirement for a fixed discount on excluded items by awarding only a de minimis portion of the contract to the bidder. Respondent rewarded the bidder not conforming to the requirement for a fixed discount on excluded items by awarding substantially all of the contract to that bidder. If Respondent elects to purchase all excluded items from Petitioner, Respondent will have used the contract for Item 1 lamps to induce a meaningful discount from Petitioner without awarding Petitioner with the concomitant economic incentive intended by the ITB. Such a result frustrates the ITB's intent. Paragraph 5 Respondent's interpretation of paragraph 5 fails to explicate its proposed agency action. Respondent's interpretation of paragraph 5: leads to an absurd result; is inconsistent with the plain and ordinary meaning of the terms of the ITB; and is inconsistent with Respondent's actions. Respondent's interpretation imbues paragraph 5 with limitless curative powers. Respondent's interpretation empowers paragraph 5 to cure the deletion of all General Conditions in the ITB whether stricken by pen or excised with scissors. Respondent's interpretation of paragraph 5 would transform a bid containing no General Conditions into a responsive bid. Respondent's interpretation of paragraph 5 is inconsistent with the plain and ordinary meaning of its terms. Paragraph 5 operates to cure "additional" terms. It does not operate to restore deleted terms. Respondent's interpretation of paragraph 5 is inconsistent with Respondent's actions. Respondent did not rely on paragraph 5 to cure Intervenor's deletions without further action. Respondent took further action to cure the deletions. Further Action On the morning of May 20, 1996, the purchasing analyst for Respondent telephoned Intervenor's regional sales manager. The purchasing analyst demanded that Intervenor accept the conditions Intervenor had deleted from its bid by submitting a letter of acceptance before the bid tabulations were posted at 4:00 p.m. on the same day. The regional sales manager contacted Intervenor's corporate headquarters in Cleveland, Ohio. Intervenor authorized the regional sales manager to accept the deleted paragraphs. By letter faxed to Respondent at approximately 3:20 p.m. on May 20, 1996, Intervenor accepted the paragraphs it had previously deleted. The letter stated that, "GE Lighting [will accept] the Contract Conditions noted in Paragraphs 11 and 24 of the Lamp Quotation." [emphasis not supplied] At 4:00 p.m. on May 20, 1996, Respondent posted the bid tabulation form. The bid tabulation form stated that the "award is contingent upon General Electric's acceptance of all the terms in conditions (sic)" in the ITB. Respondent argues that the purchasing analyst who contacted Intervenor on the morning of May 20, 1996, exceeded her authority. Respondent characterizes the word "contingent" in the bid tabulation form as "poorly written" and a "bad word." Agency Construction Of ITB Terms Respondent construes terms in the ITB in a manner that is inconsistent with their plain and ordinary meaning. The ITB requires that, "The bidder [shall] offer a fixed discount from retail price list on all excluded items." [emphasis supplied] Respondent interprets the quoted provision as meaning the bidder may offer such a fixed discount if the bidder elects to do so. The purpose of the ITB is to establish "[a] 24 month contract" to supply large lamps to the state. [emphasis supplied] Respondent interprets the quoted provision as meaning that the purpose of the ITB is to establish two contracts. The ITB states that, "During the term of the contract established by this bid, all purchases of items [will] be made from [the] successful bidder." [emphasis supplied] Respondent interprets the quoted provision as meaning that purchases of some items will be made from one successful bidder and that purchases of other items will be made from a second successful bidder. The ITB states that the contract "[shall] be made statewide on an all or none basis" to the responsive bidder who satisfies the conjunctive requirements for: "[the] lowest "Award Figure Item (1; [and] lowest Award figure for Item (2." [emphasis supplied] Respondent interprets the quoted provision as meaning that separate contracts may be made statewide on less than an all or none basis to separate responsive bidders who satisfy the disjunctive requirements for either the lowest bid for Item 1 lamps or the lowest bid for Item 2 lamps, or both. The ITB requires offers to be submitted for all items listed within a group for a bid to qualify for evaluation. Respondent interprets the requirement as meaning that a bidder who does not qualify for evaluation for all of the groups in the contract nevertheless qualifies for evaluation for the contract. Finally, the ITB states that failure to comply with the formatting requirements for the diskette "[will] result in disqualification of your bid." [emphasis supplied] Respondent interprets the quoted language to mean that failure to comply with prescribed formatting requirements may result in disqualification of a bid. The interpretations of the quoted terms proposed by Respondent, individually and collectively, frustrate the purpose of the ITB. They also ignore material requirements of the ITB. Material Deviation Respondent deviated from the rule or standard fixed in the ITB in several respects. First, Respondent altered the bid evaluation procedure prescribed in the ITB. Second, Respondent ignored the requirement to award a single contract to a single bidder. Third, Respondent ignored the requirement that bidders provide a fixed discount on excluded items. Fourth, Respondent ignored the requirement to comply with the formatting requirements prescribed in the ITB. Each deviation from the rule or standard fixed in the ITB is a material deviation. Each deviation gives Intervenor a benefit not enjoyed by other bidders. Each deviation affects the contract price and adversely impacts the interests of Respondent. 4/ 5.5(a) Benefit Not Enjoyed By Others Intervenor enjoyed a benefit not enjoyed by other bidders. Intervenor obtained a competitive advantage and a palpable economic benefit. Respondent altered the bid evaluation procedure prescribed in the ITB. On the morning of May 20, 1996, Respondent disclosed the bid tabulations to Intervenor alone, 5/ gave Intervenor an opportunity that lasted most of the business day to determine whether it would elect to escape responsibility for its original bid, allowed Intervenor to cure the defects in its bid, accepted Intervenor's altered bid, and conditioned the bid tabulations on Intervenor's altered bid. Respondent used a bid evaluation procedure that is not prescribed in the ITB and did not allow other bidders to participate in such a procedure. 6/ In effect, Respondent rejected Intervenor's initial bid, with paragraphs 11 and 24 deleted, and made a counter offer to Intervenor to accept a bid with paragraphs 11 and 24 restored. Intervenor accepted Respondent's counter offer. Respondent excluded other bidders from that process. Respondent gave Intervenor an opportunity to determine whether it would elect: to escape responsibility for its original bid by declining Respondent's counter offer; or to perform in accordance with an altered bid by restoring paragraphs 11 and 24. A bidder able to elect not to perform in accordance with its bid has a substantial competitive advantage over other bidders unable to escape responsibility for their bids. 7/ Respondent awarded substantially all of the contract to Intervenor even though Intervenor failed to provide a meaningful discount on excluded items. Respondent provided Intervenor with a palpable economic benefit. 5.5(b) Bid Price And Adverse Impact On The State Respondent did not award a contract for excluded items. Respondent's proposed agency action allows Respondent to purchase excluded items from either Intervenor or Petitioner. If Respondent were to purchase all of the excluded items it needs from Intervenor, Respondent could pay substantially more for excluded items than Respondent would save from the five percent price advantage in Intervenor's bid for Item 1 lamps. In such a case, Respondent's proposed agency action would effectively increase costs to the state that are inherent, but not stated, in the ITB. 8/ Conversion of incorrectly formatted data to the required font shifts prices to incorrect columns and causes other problems in accessing information in the diskette. Such problems can not be rectified easily but require substantial time and effort. Responsive Bidder Respondent did not award the contract intended by the ITB to the lowest responsive bid. Although Intervenor's bid is the lowest bid for Item 1 lamps, it is not the lowest responsive bid for Item 1 and 2 lamps. Petitioner's bid is the lowest responsive bid for Item 1 and 2 lamps. 9/ Respondent is statutorily required to award the contract to the lowest responsive bidder. 10/ Illegal Intervenor's bid is not responsive within the meaning of Sections 287.012(17), Florida Statutes (1995). 11/ It does not conform in all material respects to the ITB. Intervenor's unaltered bid deletes paragraphs 11 and 24. It does not include a fixed discount on excluded items, does not include a bid for Item 2 lamps, and does not conform to the formatting requirements in the ITB. Section 287.057 requires Respondent to award the contract to the bidder who submits the lowest responsive bid. Respondent has no authority either: to consider bids that are not responsive; or to award the contract to a bidder other than the lowest responsive bidder. Respondent's attempt to engage in either activity is ultra vires and illegal. Minor Irregularities The ITB encourages, but does require, bidders to include quantity discounts for Item 1 and 2 lamps. Petitioner's bid does not include quantity discounts. Petitioner's bid does not fail to conform to material requirements in the ITB. Petitioner does not manufacture Item 1 and 2 lamps. Sylvania manufactures the lamps Petitioner sells. Petitioner has no legal right to require Sylvania to allow inspection of its facilities pursuant to paragraph 11 of the General Conditions. Petitioner's ability to provide the requisite inspections requires the cooperation of Sylvania. Petitioner's bid requires payment by the state within 30 days of an invoice. Section 215.422 and the ITB provide that Respondent has 40 days to issue warrants in payment of contract debts and that interest does not accrue until after 40 days. The defects in Petitioner's bid are minor irregularities within the meaning of Florida Administrative Code Rule 60A-1.001(16). 12/ They neither affect the bid price, give Petitioner a competitive advantage, nor adversely impact Respondent's interests. Petitioner has the practical ability to arrange inspection's of Sylvania's facilities. Petitioner is legally responsible for failing to do so. Respondent's employees have never visited Sylvania's facilities during the 10 years in which Petitioner has been the contract vendor to the state. The requirement for payment within 30 days does not obviate the provisions of Section 215.422. Private contracts can not alter mutually exclusive statutory provisions.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order granting Petitioner's protest of Respondent's proposed agency action. RECOMMENDED this 26th day of September, 1996, in Tallahassee, Florida. DANIEL S. MANRY, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of September, 1996.
Findings Of Fact On March 1, 1984, Respondent gave notice to qualified contractors that it would receive sealed bids for State Project No. 72000-3541, referred to as Federal-Aid Project No. M 9041(10). This project involves the installation of a computerized traffic control system for the City of Jacksonville. In response to the opportunity to bid, the Department of Transportation received four bids. Petitioner, Winko-Matic Signal Company, was among the bidders. The other bidders were Georgia Electric Company, Traffic Control Devices, Inc., and Sperry Systems Management. The bids of Traffic Control Devices and Sperry Systems were rejected based upon an error in bid tabulations on the part of Traffic Control, a mistake on the quantities page, with the Sperry rejection being based upon a bid bond problem. Traffic Control had been the apparent low bidder with a bid of $1,964,115. Winko-Matic was the second apparent low bidder with a bid of $2,279,604.70. The Department of Transportation had estimated that the total cost of the Jacksonville project would be $ 2,024,680.61. Having discarded the bid of Traffic Control Devices, the Department of Transportation telegrammed Winko-Matic on April 4, 1984, advising Winko-Matic that it was the apparent low bidder for the Jacksonville project. Subsequently, the awards committee of the Department of Transportation met on April 18, 1984, and determined to reject all bids and re-advertise the job. In the course of this meeting the awards committee was told that there were erratic bids received on contract items, pointing to some perceived confusion among the contractors as to requirements of the contract. Discussion was also held on the possibility of establishing a pre-bid conference if the project was re advertised. The awards committee then voted to reject the bids on the basis that the apparent low bidder, Winko-Matic, had submitted a bid which-was 12.6 percent over the Department's estimate, instead of being within 7 percent of the Department of Transportation's pre-bid estimate, a point above which the Department of Transportation in its non-rule policy would call to question to the acceptability of the apparent low bid. In addition to deciding to reject all bids and re-advertise, it was determined that a pre-bid conference should be scheduled at least 30 days prior to the bid-letting date. Winko-Matic was advised that the Department of Transportation's decision to reject all bids by correspondence of May 4, 1984, in which it was indicated that all bids had been rejected based upon the fact that they were too high. In response to this notice of rejection, Winko-Matic, effective May 17, 1984, filed a written notice of protest. The case was subsequently referred to the Division of Administrative Hearings on June 20, 1984, and a final hearing date was established by Notice of Hearing of July 5, 1984. The hearing date in this cause was September 12, 1984. The Jacksonville project in question requires the utilization of what has been referred to "UTCS Enhanced" software. This software package is unique and has only been used in a limited number of locations within the country. Those locations are Los Angeles, California; San Diego, California; Broward County, Florida; and Birmingham, Alabama. Another unique feature within the project design is the use of an associated coaxial computer sys gem. Given the unique nature of this project and the fact that the Department of Transportation had never advertised for bids related to UTCS software, Department of Transportation obtained assistance from a consulting firm, Harland, Bartholomew & Associates. In fulfilling its function Harland gave estimates to include an estimate related to the projected cost of the software, Item 681-102. The Harland estimate for the overall project was $2,143,130 including a $100,000 estimate for the software system. That estimate relating to the software was subsequently adjusted by the Department of Transportation to depict a cost of $13,780. The Department of Transportation estimate was based upon information within its computer related to a system unlike the enhanced software contemplated by the plans and specifications. In other words, the stored information in the Department of Transportation computer was not the same as contemplated by the plans and specifications in the Jacksonville project. Moreover, the initial estimate of Harland was based upon the idea of an extended software system, as opposed to an enhanced software system. Winko-Matic had bid $389,500 for the software in Item 681-102. That estimate was premised upon figures obtained from JHK and Associates, the group which Winko-Matic intended to use as its subcontractor for the enhanced software portion of the project. JHK developed the software and was responsible for systems integration of the Los Angeles, California, project, one of the locations in which UTCS enhanced software has been utilized. JHK premised its estimate for the software hare upon experience in Los Angeles and an evaluation of the tasks to be performed related to the enhanced software. This included general software development activities, hardware innovation, installation costs during the period of acceptance and testing, and the preparation of data base. The JHK bid price was $339,500. Another $50,000 was added to that price related to what the Petitioner describes as its management costs for that item. By June 20, 1984, when a further meeting was held by the awards committee on the subject of the Jacksonville project, it was concluded that the estimate made by the Department of Transportation of $13,780 was not correct, on the topic of the enhanced software. A more reasonable estimate, according to the information imparted in this session, would be $200,000 for enhanced software as called for in this project, with a $100,000 amount being a reasonable estimate had they chosen to use extended software. Adjusting the initial price related to the UTCS enhanced software to reflect a corrected estimate of the Department of Transportation in its original advertised bid, that estimate becomes $2,210,900.61 and its consultant Harland's estimate becomes $2,243,130. With this adjustment, the differential in the estimate made by the Department of Transportation and the Petitioner approaches 3 percent and not the 12.6 percent originally found. The 3 percent is below the threshold of 7 percent used as the policy for determining whether a bid might be rejected as being far beyond the acceptable limits set forth in the Department of Transportation's estimate. In the aforementioned June 20, 1984, awards committee meeting, the Department of Transportation continued to hold the opinion that all bids in the Jacksonville project should be rejected and the matter re-advertised. Although the problem pertaining to the estimate of the cost of the enhanced software package had been addressed, the committee continued to feel that the prices received in the bid letting were erratic Reference was also made to revisions or modifications to the project plan which would be offered if the matter were re- advertised. It was also pointed out that the Federal Highway Administration would concur in the Department's decision to reject all bids and would accept modifications. The awards committee again voted to reject the bids. The matter was again considered by the awards committee on August 31, 1984. On that occasion, it was pointed out that the revisions contemplated by the Department of Transportation, should the matter be re-advertised, would not affect in a substantial way the cost estimate for the project with the exception of Item 680-101, the system control equipment (CPU), which would promote a lower price for the project. The committee determined in the August, 1984, meeting to reject all bids and re-advertise. While the initial notice of rejection of May 4, 1984, had suggested the basis for rejection as being the fact that Petitioner's bid far exceeded the 7 percent allowance for price above the Department of Transportation's estimate of costs, the meetings of the awards committee and the suggestion of the Respondent in the course of the final hearing in this case indicated that there were other reasons for the decision to reject. Those Were: (a) an apparent lack of clarity among bidders regarding specifications for the Jacksonville job, (b) the desire of the Respondent to revise specifications on the Jacksonville project; and (c) a lack of sufficient competition in the bids. In connection with the first of the additional reasons Respondent suggests that variations within the bid responses related to particular line items within the specifications point out a lack of clarity in the project's specifications or confusion by bidders related to those specifications. Respondent did not bring forth any of the bidders who might speak to the matter of possible confusion or misunderstanding concerning some of the bid items. By contrast, the Petitioner's president; the president of JHK & Associates and James Robinson, Harland's project manager for the Jacksonville job, did not find the specifications in the original documents to be confusing. In addition, the testimony of those individuals established the fact that bid variations related to particular line items are not extraordinary and do not establish any apparent confusion by the bidders as to the requirements of those line items. In effect, what the differentials demonstrate are variations related to the manufacture or in-house capabilities of the bidders and an effort to allocate discretionary costs in various places as to line items. Moreover, they might indicate last- minute adjustments in the bid quote prior to the opening and a possible effort by a contractor to enter into a new job market. Finally, they demonstrate offsetting which is the allocation of item prices by a contractor to maximize profits. To do this, a contractor submits high bids on items representing quantities which the contractor feels will increase after the contract is awarded and submits low bids on items representing quantities which are not likely to change. In summary, while the Department of Transportation in its presentation expressed some concern about the variations in the pricing in the bid quotations offered by the respective bidders in this project, its suspicions on the question of the possible clarity of its specifications were not confirmed and are not convincing. On the topic of revisions which the Department of Transportation would offer if the matter were re-advertised, with one exception those matters appear to be items that could be attended through change orders or supplemental agreements. They are not matters which necessarily must be addressed through a rejection of all bids and a re-advertising of the project. The lone exception to this is the possibility that the Department of Transportation may not be able to protect its proprietary rights in the enhanced software which is being developed for the project, under the terms of the present bid documents. Given that uncertainty, the Respondent would wish to re-advertise the project and make certain that its proprietary interests are protected. Finally, Respondent has alluded to the fact that the Jacksonville project should be re-advertised in view of the lack of competition in the initial letting. Only four bidders expressed an interest in this project at the time of the first letting. Of those, two bidders were found to be responsive. While this is a low number of bidders, there does not appear to be any agency practice on the part of' the Department of Transportation to the effect that this number of bidders would not be accepted. Moreover, no indication has been given that should the matter be re-advertised a greater number of bidders would express an interest than was the case in the first letting. Consequently, this reason for bid rejection is not acceptable. If Respondent did not reject the bids and re-advertise the project, Winko-Matic would be the successful bidder in the Jacksonville project.
The Issue The issues to be resolved in this proceeding concern whether the Petitioner, Close Construction, Inc. (Petitioner), (Close) was the lowest responsive and responsible bidder in the Request For Bid (RFB) Number 6000000262, whether the subject contract should be awarded to the Petitioner, and, concomitantly, whether the Respondent agency's decision to award the contract to the Intervener, Worth Contracting, Inc. (Worth) was clearly erroneous, contrary to competition, arbitrary or capricious.
Findings Of Fact The South Florida Water Management District is a public corporation authorized under Chapter 373, Florida Statutes. It issued a request for bids for the refurbishment and automation of certain facilities in Broward County, Florida. Close is a construction company duly authorized to do business in the state of Florida. It was one of the bidders on the procurement represented by the subject request for bids and is the Petitioner in this case. This dispute had its beginnings on June 5, 2009, when the Respondent issued RFB number 6000000262. The RFB solicited construction services for the refurbishment and automation of two facilities in Broward County. The procurement would involve the installation of new direct-drive electric pumps at the Respondent's G-123 Pump Station in Broward County, along with the construction of an equipment shelter and the replacement of a retaining wall with a poured concrete retaining wall, as well as refurbishment of "pump flap gates." The RFB also requested construction services for the replacement of gates at the Respondent's S-34 water-control structure in Broward County. Both facilities would thus be automated so that they can be remotely operated from the Respondent's headquarters in West Palm Beach. After issuance of the RFB, two addenda were supplied to vendors and were posted. The first addendum was posted on or about June 19, 2009, concerning a change in specifications for flap gates and is not the subject of this dispute. Addendum No. Two was electronically posted on or about June 30, 2009. It amended the technical specifications of the RFB by deleting Section 11212 regarding measurement of payment of electric motors/belt-driven axial flow pumps. That addendum also added a new measure and payment to Subpart 1.01 of the technical specifications to provide for an owner-directed allowance of $40,000.00 to provide for the potential need for certain electrical utility work to be done by FPL in order to complete the project. Addendum No. Two added an additional term to the RFB in providing that the $40,000.00 allowance price "Shall be added to the other costs to complete the bid." The second Addendum also stated, "The allowance price shall be used at the discretion of the District and, if not used, will be deducted from the final Contract Price." That addendum also directed bidders to replace the original Bid Form 00320-2, which had been enclosed with the RFB, with a new Bid Form, 00320R1-2. The new Bid Form is identical to the original form except that the schedule of bid prices contained in paragraph four, on page 003201-2, was altered to itemize the $40,000.00 discretionary cost allowance. The original form had contained a single line for the bidder's lump sum bid price, whereas the revised form provided for a lump sum bid amount to be itemized and a base bid amount, which required the bidder to enter on the form the amount of its bid, then add the discretionary cost amount and write the sum of those two numbers on a third line. In paragraph four of the new bid form there is re- printed language concerning the use of the discretionary allowance which appeared on the face of Addendum No. Two. Other than the change to paragraph four and the alteration of the page numbers to include an "R" in the page number, the revised bid form is identical to the original bid form. The other bid documents were not altered in any manner by Addendum No. Two. The deadline for bid submissions was Thursday, July 9, 2009, at 2:30 p.m. The Petitioner timely submitted its bid to the District. In submitting its bid however, the Petitioner used the original bid form which had been enclosed with the RFB. The bid form submitted was an exact copy of the bid form furnished by the District which Close had printed from the electronic copy of the RFB received from the District. The Petitioner did not substitute the revised bid form, attached to Addendum No. Two, for the original form in submitting its bid. The Petitioner's bid was deemed non-responsive by the District and was rejected on the basis that Close had failed to submit the bid on the revised form required by Addendum No. Two. Thereafter, the District, at its August 13, 2009, meeting, approved award of the bid to Worth. The intent to award was posted electronically on or about August 14, 2009. The persuasive evidence establishes that Close received both addenda to the bid documents. It was aware of the Addendum No. Two, and it accounted for all of the changes to the technical specifications made in both addenda in the preparation of its bid. The evidence shows that Close was aware of the $40,000.00, owner-directed cost allowance and that it incorporated it in the formulation of its total bid price. Thus, Close's final bid amount was $3,751,795.00. That number included the $40,000.00 cost allowance at issue, added to the bid documents by Addendum No. Two. The internal bid work sheets, prepared by personnel of Close, identified and itemized the $40,000.00 discretionary cost allowance as a component of the final bid price. The persuasive evidence thus establishes that Close's final bid amount did include the $40,000.00 cost allowance. Moreover, the written notes of witness Christopher Rossi, the estimator for Close, show the $40,000.00 amount as an "FPL Allowance." Both Mr. Rossi and Mr. Boromei, the Vice President for Close, who prepared the bid, explained that the $40,000.00 was understood by Close to be a cost allowance, that it would only be charged to the District to the extent that it was actually used, at the District's discretion. If it were not used, it was to be deducted from the overall contract price. Addendum Two specifically provides that the discretionary cost allowance was to be used only at the discretion of the District and that the unused portion would be deducted from the contract amount. When Close submitted its bid it mistakenly submitted it on the original bid form and failed to exchange the bid forms as directed in Item Two of Addendum No. 2. In paragraph one of both bid forms, however, the bidder is required to specifically fill out, acknowledge and identify all addenda. By doing so the bidder expressly agrees to build the project in conformance with all contract documents, including all addenda, for the price quoted in the bid. Close completed this paragraph, specifically identified both Addendum One and Addendum Two, and specifically agreed to strictly conform, in performance of the work to the plans, specifications and other contract documents, including Addendum Nos. One and Two. Paragraph one was not changed by the addition of Addendum No. Two and it is identical in both the original and the revised forms at issue. Paragraph one of the original and the revised bid forms constitutes an agreement by the bidder to perform and construct a project "in strict conformity with the plans, specifications and other Contract Documents. . . ." The addenda are part of the contract documents and are expressly referenced as such in this agreement. Both bid forms, the original and the revised, include paragraph eight, which clearly states that the bidder will post a bid bond to secure and guaranty that it will enter into a contract with the District, if its bid is selected. Paragraph eight was unchanged by Addendum No. Two and its terms are identical in both Bid forms at issue, including the form that Close signed and submitted as its bid. The persuasive evidence shows that in submitting its bid, whether on either form, Close committed itself to the identical terms as set forth in the identical contract documents agreed to by Worth and the other bidders. The evidence established that Close intended to bind itself to the terms of the RFB, and all terms of Addendum No. Two, including the discretionary cost allowance term. Close considered itself bound to enter into a contract for the price of its bid if selected by the District. It likewise considered that the price of its bid, would only include the cost allowance if the discretionary allowance was implemented by the District. Upon the opening of the bids, the firm of Cone and Graham, Inc., was identified as the lowest bidder. Cone and Graham's bid was in the amount of $2,690,000.00. Close was the second lowest bidder, with a bid of $3,751,795.00. The third lowest bidder was Worth Contracting, Inc., with a bid of $3,898,410.00. Cone and Graham was allowed to provide additional information and to even meet with some District staff following the opening of its bid. The additional information it was allowed to provide concerned technical specifications of the pumps proposed in its bid. Through this verification process conducted with the Agency, Cone and Graham ultimately convinced the District to permit them to withdraw its bid without forfeiting their bid bond. This left the Petitioner, Close, the lowest bidder, at $146,615.00 less than the bid submitted by Worth, the initially-awarded bidder. Close's bid, upon review, was rejected as non- responsive due to its failure to exchange the original Bid form with the revised Bid form, as indicated above, in spite of the fact that Close had also agreed to adhere to the entirety of Addendum No. Two on the face of the Bid form. Thus the recommended award to Worth for the above-referenced additional amount of bid price was adopted by the District, engendering this protest. James Reynolds, the Contracts Specialist for the District, conceded that it was apparent on the face of Close's bid that a mistake had been made in the use of the original form, rather than the revised form. He conceded there was an inconsistency between Close's clear acknowledgement of and agreement to the terms of the contract documents, which expressly included Addendum No. Two and Close's apparent mistaken use of the original Bid form. Under the express terms of Article 19.03 of the RFB, "The Bid shall be construed as though the addendum(a) have been received and acknowledged by the bidder." Mr. Reynolds admitted, however, that he did not apply the terms of Article 19.03 of the RFB in his review of Close's bid and did not construe the bid in the manner provided in the RFB to resolve the apparent inconsistency. He reasoned that Close had used the wrong bid form and looked no further. The District's Procurement Manual provides a procedure whereby a bidder may correct inadvertent mistakes in its bid. Under the terms of Chapter 5-5 of that manual, where the District knows or has reason to conclude, after unsealing of bids, that a mistake may have been made by a bidder, the District "shall request written verification of the bid." In such a circumstance the bidder "shall be permitted the opportunity to furnish information in support of the bid verification as long as it does not affect responsiveness, i.e., the bid substantially conforms to the requirements of the RFB as it relates to pricing, surety, insurance, specifications and any other matter unequivocally stated in the RFB as determinant of responsiveness." See Joint Exhibit 7,6 pages 61 and 62, in evidence. Mr. Reynolds admitted in his testimony that he did not follow the procedure set forth in the manual for verifying a bid because, in his view, that would be allowing an impermissible supplementation of Close's bid. Ms. Lavery, in her testimony, in essence agreed. The Procurement Manual expressly required the District, upon recognizing the mistake and an inconsistency apparent on the face of Close's bid, to verify that bid and to provide Close with the opportunity to furnish information in support of bid verification. Thus, by the express terms of the manual, a bidder must be given an opportunity to clarify mistakes. The Procurement Manual expressly permits a bidder under these circumstances to correct any "inadvertent, non- judgmental mistake" in its bid. Chapter 5 of the Manual provides that "a non-judgmental mistake" is a mistake not attributable to an error in judgment, such as mistakes in personal judgment or wrongful assumptions of contract obligations. Inadvertent technical errors, such as errors of form rather than substance, are considered non-judgmental errors." See Joint Exhibit 7, page 62, in evidence. It is patently apparent that Close's use of the original bid form, inadvertently, while also unequivocally acknowledging and agreeing to the entirety of Addendum No. Two, represented a non-judgmental mistake. Both of the District witnesses, however, testified that the policy regarding mistakes was not followed and Close was not given an opportunity under the District's policy to provide additional information to support verification of the bid. Although Close failed to substitute the revised Bid form for the original Bid form, as called for by Addendum No. Two, its bid was substantively responsive to the technical specifications and requirements of the RFB, and the irregularity is technical in nature. The parties stipulated that the use of the original form, rather than the revised bid form, was the sole basis for Close being determined to be non-responsive by the Agency. In accordance with Florida Administrative Code Rule 40E-7.301, in Chapter 5 of the District's Procurement Manual, the District reserves the right to waive minor irregularities in a bid. A material irregularity is defined by the District's policy as one which is not minor in that it: (a) affects the price, quality, time or manner of performance of the service such that it would deprive the District of an assurance that the contract will be entered into, performed and guaranteed according to the specified requirements; (b) provides an advantage or benefit to a bidder which is not enjoyed by other bidders; or (c) undermines the necessary common standards of competition. See Joint Exhibit 7, page 58, in evidence. The preponderant, persuasive evidence shows that the irregularity in Close's bid did not affect the price of the bid or truly deprive the District of assurance that the contract would be entered into and performed according to all the terms of the RFB, including addenda. The evidence established that Close actually included the $40,000.00 discretionary cost allowance in its final bid price. It merely did not show it as a separate itemization, because it did not use the revised form providing that itemization line. The fact that the discretionary allowance was itemized in the revised bid form, as part of the bid amount, does not equate to an effect on the contract price as a result of Close's using the original Bid form. Close's error, by mistakenly submitting its bid on the original bid form, did not alter the price of its bid. The evidence clearly established that the bid price for Close's bid would be the same regardless of which form it used. Moreover, the preponderant, persuasive evidence establishes that the use of the original Bid form by Close did not deprive the District of assurance that the contract would be performed in accordance with the all bid documents. Close's bid, secured by its bid bond, clearly acknowledged and agreed to the express terms of Addendum No. Two in their entirety, which included the terms under which the discretionary cost allowance could be applied. Close considered itself bound to the terms of the RFB and assured the Agency that it was so bound by the written acknowledgement and agreement it submitted to the Agency as part of its bid, concerning the elements of Addendum No. Two. The evidence demonstrated that Close understood that the $40,000.00 amount was a discretionary cost allowance and that Close would not be entitled to it unless the District decided to use it. Despite the opinion of Agency witnesses to the contrary, the error in Close's bid was a technical one and non- material because it did not confer a competitive advantage upon Close. Close's use of the wrong form did not alter the price of its bid. Its mistake in the use of the original bid form could only change the relative, competitive positions of Close and Worth if the amount of the discretionary cost allowance was greater or equal to the difference between those two bids, i.e., the $146,650.00 amount by which Worth's bid exceeded the bid of Close. 1/ The bid of Worth exceeds Close's bid by an amount far greater than the amount at issue in the discretionary cost allowance identified in Addendum No. Two and expressly itemized in the revised Bid form, i.e. $40,000.00. The District contends that Close gained some competitive economic advantage over other bidders by having the means by which it could optionally withdraw its bid, based upon alleged non-responsiveness, in not substituting the revised Bid form which would contain the itemization of the $40,000.00 cost allowance. It is difficult to see how it could gain a competitive advantage versus other bidders through some perceived ability to deem itself non-responsive, at its option, and withdraw its bid, thus denying itself the contract. The competitive bidding laws are designed to prevent a firm from gaining a competitive advantage in obtaining a contract versus the efforts of other bidders, not in depriving itself of the opportunity to get the work. Moreover, concerning the argument by the District that this may confer the advantage to Close of allowing it to withdraw its bid at its option and still obtain a refund of its bid bond; even if that occurred, it would not confer a competitive advantage vis-à-vis other bidders. It would merely involve a potential pecuniary advantage to Close's interest, versus that of the Agency itself, which obviously is not a bidder. Moreover, it should again be pointed out that Cone and Graham was allowed to provide additional information concerning its bid elements, and even to meet with the District staff, following the opening of the bids. It was then allowed to withdraw its bid without forfeiting its bid bond. If the District had inquired, by way of verification of Close's bid, as to whether the discretionary cost amount was included in it's bid, that inquiry does not equate to allowing Close to unlawfully supplement its bid. Indeed, if in response to such an inquiry, Close announced that the discretionary allowance was not included in its bid, its bid at that point would be materially non-responsive to the specifications. If Close was then allowed to supplement its bid by changing its price to add the allowance, such would indeed be an unfair competitive advantage and a violation of law on the part of Close and the Agency. The evidence does not show that such happened or was proposed by any party. If a verification inquiry had been made and Close announced that, indeed, its bid price did include the subject discretionary cost allowance, without further response to the specifications being added, then no competitive advantage would be afforded Close and no legal violation would occur. In fact, however, as pointed out above, the verification request, pursuant to the District's policy manual, was never made. This was despite the fact that the District's witness, Mr. Reynolds, acknowledged that the use of the original bid form was an apparent mistake on the face of the bid, when considered in conjunction with Close's express agreement to construct the project in strict conformance with all contract documents, and particularly with regard to Addenda Numbers One and Two. The non-judgmental mistake, involving use of the original bid form in lieu of the revised bid form, could have been easily clarified by a verification inquiry. That policy was not followed, based solely on the fact that the wrong bid form was used, even though the preponderant, persuasive evidence shows that in all material and substantive respects the bid was a conforming, responsive bid and included in its price the discretionary cost allowance. The preponderance of the evidence shows that the mistaken use of the original Bid form was a non- material irregularity under the District's policies and the terms of the RFB. The District's actions in failing to uniformly apply its own bid verification policy when, in fact, it had allowed verification to one of the other bidders, and when, according to its own witness, it perceived an apparent mistake, was clearly erroneous. It is true that Close may not supplement its bid by changing material terms, but it is permitted to verify whether, in light of the mistaken use of the original Bid form, its bid price, as submitted, included the $40,000.00 discretionary allowance or not. Providing such "yes or no" type of additional information in order to clarify, and only clarify, information already submitted in the bid, in response to an inquiry by the District does not constitute "supplementation" of the bid for purposes of Section 120.57(3)(f), Florida Statutes (2008). NCS Pearson, Inc. v. Dept of Education, 2005 WL 31776, at page 18 (DOAH, Feb. 8, 2005). Even without verification of the bid, the bid on its face agrees to compliance with all terms and specifications, including Addendum No. Two. It is thus determined that there is no material irregularity. The bid submitted by Close does not afford it any competitive advantage vis-à-vis the other bidders and it is responsive.
Recommendation Having considered the foregoing Findings of Fact, conclusions of law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a Final Order be entered by the South Florida Water Management District, awarding the subject contract for RFB 6000000262 to the Petitioner herein, Close Construction, Inc. DONE AND ENTERED this 5th day of January, 2010, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of January, 2010.
The Issue Whether, in issuing the Revised Recommendation/Tabulation for contracts for Items 1 and 3 for Invitation to Bid No. 15- 048E, Multifunctional Devices, Cost-Per-Copy, Respondent acted contrary to one or more governing statutes, rules, policies, or procurement specifications, or any combination thereof; and if so, for each such instance, whether the misstep was clearly erroneous, arbitrary or capricious, or contrary to competition.
Findings Of Fact On June 3, 2014, SBBC issued ITB No. 15-048E (the ITB) entitled "Multifunctional Devices, Cost-Per-Copy" for the provision and maintenance of copying devices during the contract term. The listed Submittal Requirements were: Manufacturer's Authorization Special Condition 8; Descriptive Literature Special Condition 6; and Material Safety Data Sheets Special Condition 16. A Bidder's Preference Statement was not identified as a Submittal Requirement. Section 4, Paragraph 2, of the ITB was entitled "TERM" and notified bidders that SBBC sought through the award of this bid to "establish a contract for the period beginning from the date of award and continuing through June 30, 2017." The Bid Summary Sheet found at Section 5 of the ITB requested bidders to provide cost-per-copy based on a stated average monthly number of copies, and to extrapolate cost out for 12 months and for 36 months. Page 1 of the ITB contained a certification to be executed by each bidder's authorized representative which stated in pertinent part as follows: Bidder agrees to be bound to any and all specifications, terms and conditions contained in the ITB, and any released Addenda and understand that the following are requirements of this ITB and failure to comply will result in disqualification of bid submitted. All bidders submitted a signed bidder certification. Section 3, Paragraph 1(a), of the General Conditions of the ITB provided as follows: SEALED BID REQUIREMENTS: The "Bidder Acknowledgment Section" must be completed, signed and returned with the bid. The Bid Summary Sheet pages on which the Bidder actually submits a bid, and any pages, upon which information is required to be inserted, must be completed and submitted with the bid. The School Board of Broward County (SBBC) reserves the right to reject any bid that fails to comply with these submittal requirements. BIDDER'S RESPONSIBILITY: It is the responsibility of the Bidder to be certain that all numbered pages of the bid and all attachments thereto are received and all Addendum released are received prior to submitting a bid without regard to how a copy of this ITB was obtained. All bids are subject to the conditions specified herein on the attached bid documents and on any Addenda issued thereto. Section 3, Paragraph 6, of the General Conditions of the ITB provided as follows: AWARDS: In the best interest of SBBC, the Board reserves the right to: 1) withdraw this bid at any time prior to the time and date specified for the bid opening; 2) to reject any or all bids received when there are sound documented business reasons that serve the best interest of SBBC; 3) to accept any item or group of items unless qualified by Bidder; and 4) to acquire additional quantities at prices quoted on this ITB unless additional quantities are not acceptable, in which case, the bid sheets must be noted "BID IS FOR SPECIFIED QUANTITY ONLY." On June 18, 2014, SBBC issued Addendum Number 1 for the ITB which replaced a number of pages within the bidding documents and contained responses to questions posed by prospective bidders. Addendum Number 1 included Question No. 6 in which Xerox inquired whether SBBC "would . . . consider a change to the contract term of the contract to 48 or 60-month term?" SBBC responded through Addendum Number 1 that it had amended the bid "to include additional pricing for 48 or 60-months term[s]," and SBBC continued to request proposals for a 36-month contract term. Addendum Number 1 revised Section 4, Paragraph 2, of the Special Conditions of the ITB to state as follows: TERM: The award of this bid shall establish a contract for the period beginning from the date of award and continuing through an award for a term of 36, 48 or 60 months. Bids will not be considered for a shorter period of time. All prices quoted must be firm throughout the contract period. Items will be ordered on an as needed basis. Addendum Number 1 included an Appendix A–Summary Cost Sheet which required bidders to provide cost-per-copy based on a stated average monthly number of copies, and to extrapolate cost out for 12 months, 36 months, 48 months, and 60 months. On June 20, 2014, SBBC issued Addendum Number 2 for the ITB. The first page of Addendum Number 2 advised prospective bidders, "This Addendum amends the above referenced bid in the following particulars only: 1. DELETE: Appendix A–Cost Summary Sheet INSERT: Revised Appendix A–Cost Summary Sheet." The first page of Addendum Number 2 further cautioned bidders that "[i]t is important to include the REVISED page when submitting your response." Addendum Number 2 went on to provide a Revised- Appendix A-Summary Cost Sheet which stated "A Cost Summary Sheet must be completed for each options [sic] 36 months, 48 months and 60 months" and included a cost summary sheet for each of those three options. The ITB and addenda numbers 1 and 2 were released by SBBC via Onvia DemandStar, with email notices thereof to prospective vendors who subscribed to its bid notification service. Toshiba downloaded the ITB, Addendum Number 1, and at least the first page of Addendum Number 2 from DemandStar prior to the submission of its bid to SBBC. Again, the first page of Addendum Number 2 cautioned bidders that Appendix A–Summary Cost Sheet had been deleted and replaced and that it was "important to include the REVISED page when submitting your response." No bid specifications protest was filed by any person or entity concerning the ITB or addenda numbers 1 or 2. On July 3, 2014, SBBC opened bids timely submitted in response to the ITB by: Toshiba; ImageNet; Innovative; Lexmark International, Inc.; and Ricoh. Konica had also presented a bid to SBBC in the bid opening room prior to the opening of bids but after the announced time for submittal of bids. The Konica bid was delivered to SBBC but was not opened at the time of the bid opening. Toshiba, the incumbent, was the only bidder that violated the pricing requirements of the ITB. The bid submitted by Toshiba utilized the version of Appendix A-Summary Cost Sheet that was released under Addendum Number 1 and only offered cost- per-copy pricing for the 60-month term option. Toshiba's bid did not submit the Revised-Appendix A-Summary Cost Sheet issued under Addendum Number 2, nor did it contain any bids offering cost per copy pricing to SBBC for the 36 or 48-month term options. Although Toshiba's bid was not rejected as non-responsive for failing to bid on the 36 and 48-month term options and for failing to utilize and complete the Revised-Appendix A-Summary Cost Sheet issued under Addendum Number 2, SBBC's staff later concluded in hindsight that it should have been rejected for such non-compliance. Toshiba's bid included a "Pricing" note immediately prior to its Appendix A–Summary Cost Sheet that stated: [Toshiba] is proposing a 60 month CPC as a response to the [ITB]. Based on the fact the [ITB] has no minimum, cancellation for convenience, ability to upgrade and downgrade with no penalty, it is in the best interest of our organization to bid a term of 60 months. This term allows us to provide the most aggressive price to the [SBBC] and maintain the excellent service and support level in place. SBBC's staff recommended that an award be made under the ITB for pricing offered for a 36-month contract term for Items 1, 2, and 3 for a contract period of August 6, 2014, through September 30, 2017. On July 10, 2014, SBBC posted its initial ITB Recommendation/Tabulation which did not consider the Konica bid. The initial posted Recommendation/Tabulation notified bidders of SBBC's intended award of contracts for Items 1 and 2 to ImageNet as the primary awardee and to Innovative as the alternate awardee for a contract period of August 6, 2014, through September 30, 2017, and recommended the award of contracts for Item 3 to Ricoh as primary awardee and to ImageNet as alternate awardee for a contract period of August 6, 2014, through September 30, 2017. Timely bid protests and bid protest bonds were filed by Konica and by Toshiba concerning SBBC's initial Recommendation/Tabulation of July 10, 2014. SBBC's Bid Protest Committee conducted a meeting with the protestors on August 26, 2014, and determined that Konica's bid had been timely submitted and directed SBBC's Procurement and Warehousing Services Department (the Department) to evaluate Konica's bid for responsiveness. It also directed the Department to revise its recommendation on the ITB to reject Toshiba's bid for Item 2 as the device offered by Toshiba for that item did not meet the ITB's specifications which called for a single device capable of performing 95 copies per minute (cpm) and Toshiba instead offered two devices that performed at 85 cpm. After reviewing Konica's bid for responsiveness, SBBC posted a Revised Recommendation/Tabulation for the ITB on August 29, 2014, which (a) recommended award of Item 1 to ImageNet for a term from October 7, 2014, through November 30, 2017, as the primary awardee and to Innovative as the alternate awardee; (b) recommended award of Item 3 to Ricoh for a term from October 7, 2014, through November 30, 2017, as the primary awardee and to ImageNet as the alternate awardee; and (c) recommended the rejection of Toshiba's bid for Item 2 for its failure to meet the specifications for that Item. On September 4, 2014, Toshiba timely filed its notice of intent to protest the August 29, 2014, posted Revised Recommendation/Tabulation. On September 15, 2014, Toshiba timely filed its Amended Formal Petition Protesting Proposed Revised Recommendation/Tabulation. SBBC's Bid Protest Committee conducted a meeting with Toshiba on November 5, 2014, pursuant to section 120.57(3), SBBC Purchasing Policy 3320, and the ITB, and rejected Toshiba's bid protest. On November 10, 2014, Toshiba timely requested that SBBC forward its bid protest to DOAH for a formal hearing. Toshiba has presented a number of arguments in these proceedings seeking to avoid the circumstances Toshiba created for itself when it failed to comply with Addendum Number 2 and violated the ITB's pricing requirements and the ITB's requirement as to the term of the contract to be awarded, when Toshiba only submitted a single bid and restricted the contract term for which it would be considered to 60 months. First, Toshiba attempts to divest SBBC of its express authority to select proposals for any contract duration for which it solicited bids other than for a month term. Second, Toshiba argues that SBBC was somehow obligated to specify within the bid specifications those business considerations that would inform SBBC's selection of the duration of the contract term to be awarded under the ITB. Third, Toshiba argues that ImageNet was non-responsive regarding the ITB's specifications concerning manufacturer's certifications. Toshiba also argues that all bidders, including itself, were non- responsive with regard to the ITB's specifications regarding bidding preference laws. None of the arguments presented by Toshiba in opposition to SBBC's intended award of Items 1 and 3 are persuasive. The Selection of the 36-Month Term SBBC's recommended award for a 36-month contract period from October 7, 2014, through November 30, 2017, is consistent with the terms and conditions of the ITB and its addenda. At the very start of this competitive solicitation, SBBC informed bidders through Section 4, Paragraph 2, of the ITB and the Bid Summary Sheet at Section 5 of the ITB that it was seeking a contract through June 30, 2017-–i.e., a 36-month contract. SBBC also made it clear in its response to Question No. 6 of Addendum Number 1 that "[t]he contract will be for a full 36 months." Although SBBC revised the bid specifications through Addendum Number 1 to allow bidders to submit "additional pricing for 48 and 60 months term[s]," "to allow the School District to consider a 48 and/or 60 months term contract," and revised Section 4, Paragraph 2, of the ITB to provide for "an award for a term of 36, 48 or 60 months," it was clear under the ITB that SBBC contemplated that a 36-month contract could serve its needs. Addendum Number 2 further revised the bid specifications by providing the Revised–Appendix A–Summary Cost Sheet which informed bidders that "a Cost Summary Sheet must be completed for each options [sic] 36 months, 48 months and 60 months." SBBC intended to review the additional pricing offered for 48 and 60- month contract terms to determine whether those particular options were a better business decision for SBBC. Several factors were considered by SBBC in selecting the contract duration for the award under the ITB. The selection of the shorter 36-month contract term was consistent with the expressed terms of the ITB and addenda and the expressed preference of SBBC's governing board to refrain from entering into long-term contracts and enabled SBBC to be flexible in finding solutions to its copying needs and to take advantage of changes that may arise in technology; avoided problems the school district was currently experiencing with a long-term cost-per- copy contract which ranged from equipment performance issues to the long-term placement of technology in schools; and enabled the school district to conduct research to determine whether future implementation of a managed print solution would provide the school district with additional cost savings or financial benefits in contrast to the cost-per-copy services being procured through the ITB. Clearly, this selection was neither arbitrary nor capricious. SBBC's elected governing board has made it known by its actions taken at public meetings that it disfavors long-term contracts for the procurement of goods and services and has gone so far as to reduce the term of contracts from the dais. SBBC's staff determined that the pricing offered to SBBC for a 60-month contract term was not significant enough to recommend a contract longer than the 36-month term SBBC had been requesting since the release of the ITB. Any cost advantages offered by Toshiba's bids for Items 1, 2, and 3 were reduced by $525,000 per year due to the disqualification of its bid for Item 2, which failed to meet the ITB's specifications. Consideration of Managed Print Services Xerox Corporation informed SBBC that a managed print services (MPS) program could save millions of dollars per year and later submitted a no bid response to SBBC regarding the ITB because SBBC was not implementing a MPS program under the ITB. SBBC had also received proposals from vendors in October 2013 concerning a MPS program and concluded that there existed a potential annual savings of millions of dollars if such a program could be implemented. All of which were additional reasonable, rational reasons for SBBC to remain consistent with its decision to award the contracts for a term of 36 months and not something longer. The ITB contains standard terms and conditions which enable SBBC to terminate an awarded contract regardless of reason and with or without cause upon 30 days written notice to the other party. Toshiba wants SBBC to rescue Toshiba from its failure to submit required bids for 36-month and 48-month periods by forcing SBBC to award a contract obligating the agency for a longer duration under the ITB than desired by the agency and then have SBBC terminate the 60-month contract award for convenience after 36 months. SBBC includes termination for convenience provisions within its contracts for goods and services due to section 1011.14, Florida Statutes, which restricts the ability of district school boards to obligate public funds for a period beyond one year. The inclusion of the standard termination for convenience clauses in its ITBs enables SBBC to enter into contracts exceeding one year which affords the school district opportunities to obtain continuity of service and price advantages that would not be available under shorter contracts. While SBBC has the ability under the ITB to terminate contracts for convenience upon 30 days' notice, it rarely does so. SBBC has never exercised its right to terminate its two prior contracts for the services sought under this ITB. Any such termination requires action by SBBC's governing board during a public meeting. SBBC's staff would not engage in the sham of recommending a contract to its governing board for a contract term longer than the period for which it intends to procure services from a vendor. SBBC's procurement staff believes that using the termination for convenience clause in the manner Toshiba recommends can have an adverse effect upon the school district's ability to encourage bidders to participate in its competitive solicitations or to offer it their best pricing. Questions 1 and 59 of Addendum Number 1 of the ITB provide evidence of concern within the bidding marketplace that SBBC might exercise its termination for convenience clauses with regard to the services being procured under the ITB and support the perception of SBBC's that it should avoid a reputation for exercising such termination authority. Toshiba argues that SBBC somehow materially misled bidders through the ITB by stating in response to Question No. 3 concerning MPS of Addendum Number 1 that: The School District is not planning to implement a Managed Print Services at this time. The School District would like to receive Additional information regarding other districts that have implemented a Managed Print Services. There are no evaluation points associated with this ITB. SBBC's responses to Question No. 3 of Addendum Number 1 were accurate and did not mislead bidders. Toshiba is the only bidder to claim to have been misled. Section 6, Paragraph 10, of the ITB requested bidders provide SBBC with information about how the awardee could transition SBBC to a MPS model from the cost-per-copy model being offered under its bid. While SBBC requested such information from vendors within the bidding marketplace, there is no evidence that any bidder's provision or omission of such information within its bid submission was considered in the selection of the recommended awardees. In fact, ImageNet was recommended for award even though it did not provide this ancillary information about transition to a MPS delivery model. Rather, the recommended awardees for a 36-month contract term for Items 1 and 3 were determined solely on the basis of cost submitted for those items by the bidders, all in accordance with the ITB. A MPS program was a possible initiative being considered by SBBC's former Chief Information Officer prior to his departure from SBBC in February 2014, at which time the school district's current cost-per-copy contract was nearing its expiration. Although SBBC still had an interest in the possibility of a MPS program, it was not going in that direction at the time it needed to release a bid for copying services to replace its current expiring contract. Toshiba contends that SBBC was somehow required to disclose to bidders whether the potential future implementation of a MPS program might impact the contract award period that SBBC might choose under the ITB. A myriad of business considerations may inform an agency in selecting the length of its contracts for goods and services, and there is no law or rule that requires an agency to specify those factors within an ITB. Responsiveness of the Bidders Toshiba has attempted to argue that ImageNet, the recommended awardee for Item 1 and the alternate awardee for Item 3, was somehow non-responsive under the ITB and ineligible for award. In support of this argument, Toshiba has referenced Section 4, Paragraph 8, of the Special Conditions of the ITB which state as follows: MANUFACTURER'S CERTIFICATION: Bidder must submit with their ITB a notarized letter from manufacturer certifying that bidder is authorized to sell, service and warrant the multifunctional devices offered within this ITB. Failure of the bidder to provide this letter with their submitted bid or upon request shall result in disqualification of entire bid. If the bidder is the manufacturer, then bidder should state that their company is the manufacturer of the equipment provided in this bid (the letter does not need to be notarized). A bid is only disqualified under Section 4, Paragraph 8, of the ITB if (1) a notarized manufacturer's letter is omitted from the bid; and (2) the bidder fails to comply with a subsequent request from SBBC to provide the letter. No bidder, including Toshiba and ImageNet, included a notarized letter from a manufacturer with its bid. SBBC did not request any of the bidders to submit a notarized manufacturer's letter at any time after the submission of bids. As a result, none of the bids, including that of ImageNet, was non-responsive for a failure to satisfy Paragraph 8 of Section 4 of the ITB. Toshiba has also argued that all bids should be rejected due to Section 3, Paragraph 1(d), of the General Conditions of the ITB which concerns bidders' preference laws and states as follows: d) BIDDING PREFERENCE LAWS: ALL BIDDERS MUST COMPLETE AND SUBMIT THE LEGAL OPINION OF BIDDER'S PREFERENCE FORM IN ORDER TO BE CONSIDERED [sic] FOR AWARD. The State of Florida provides a Bidder's preference for Florida vendors for the purchase of personal property. The local preference is five (5) percent. Bidders outside the State of Florida must have an Attorney, licensed to practice law in the out-of-state jurisdiction, as required by Florida Statute 287.084(2), execute the "Opinion of Out-of-State Bidder's Attorney on Bidding Preferences" form and must submit this form with the submitted bid. Such opinion should permit SBBC's reliance on such attorney's opinion for purposes of complying with Florida Statute 287.084. Florida Bidders must also complete its portion of the form. Failure to submit and execute this form, with the bid, shall result in bid being considered "non-responsive" and bid rejected. No bidder, including Toshiba, included an "Opinion of Out-of-State Bidder's Attorney on Bidding Preferences" form with its bid. Each bidder's omission of that form was for good reason. Section 3, Paragraph 1(d), of the General Conditions of the ITB is a boilerplate provision within SBBC's standard bidding documents that is included pursuant to section 297.084(2), Florida Statutes, for any competitive solicitations in which personal property is to be purchased by SBBC. In instances in which it solicits bids to purchase personal property, SBBC includes a "Bidder's Preference Statement" form and includes that form among the checked "Submittal Requirements" listed in Section 2, Page 1, of the ITB. This ITB did not include a "Bidders Preference Statement" form among the bidding documents or list it as one of the required submittals. The state law and the boilerplate provision at Section 3, Paragraph 1(d), of the General Conditions of the ITB are only applicable to competitive solicitations for the purchase of personal property and do not extend to competitive solicitations for the purchase of services. As Section 4, Paragraph 12, of the Special Conditions of the ITB makes it clear that the multi-functional devices to be provided by the awardee under the ITB will "remain the property of the vendor," the standard bidder's preference provision contained within the ITB is plainly inapplicable to this procurement.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the School Board of Broward County enter a final order that adopts the Findings of Fact and Conclusions of Law contained herein, dismisses the protest filed by Toshiba Business Solutions (USA), Inc., and upholds the awards of contracts under the procurement for a 36-month term from October 7, 2014, through November 30, 2017, to ImageNet Consulting of Miami, Inc., as the primary awardee for Item 1 and to Innovative Software Solution, Inc., as the alternate awardee for Item 1, and to Ricoh USA, Inc., as the primary awardee for Item 3 and to ImageNet Consulting of Miami, Inc., as the alternate awardee for Item 3. DONE AND ENTERED this 15th day of June, 2015, in Tallahassee, Leon County, Florida. S MARY LI CREASY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of June, 2015. COPIES FURNISHED: Robert Paul Vignola, Esquire Office of the General Counsel Eleventh Floor 600 Southeast Third Avenue Fort Lauderdale, Florida 33301 (eServed) William G. Salim, Jr., Esquire Moskowitz, Mandell, Salim and Simowitz, P.A. 800 Corporate Drive, Suite 500 Fort Lauderdale, Florida 33334 (eServed) Eric J. Rayman, Esquire Genovese, Joblove and Battista, P.A. PNC Center, Suite 1110 200 East Broward Boulevard Fort Lauderdale, Florida 33301 (eServed) Albert E. Dotson, Esquire Wendy Francois, Esquire Bilzin, Sumberg, Baena, Price and Axelrod, LLP 1450 Brickell Avenue, Suite 2300 Miami, Florida 33131 (eServed) Matthew Mears, General Counsel Department of Education Turlington Building, Suite 1244 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed) Robert W. Runcie, Superintendent Broward County School Board Tenth Floor 600 Southeast Third Avenue Fort Lauderdale, Florida 33301 (eServed) Pam Stewart Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed)
Findings Of Fact Introduction In February, 1988 respondent, Department of Revenue (DOR), issued a Request for Proposal and Bid Proposal Submittal Form (RFP) inviting qualified and interested vendors to submit proposals for providing approximately 19,300 square fee of office space in the central area of Broward County for DOR's district office. The contract was identified as Lease Bid No. 730-0083. The space was to be made available on July 1, 1988 or 30 days after the bid was awarded, whichever was later. According to the RFP, the term of the lease was five years with an option to renew for a second five year period. Sealed bids were to be filed in Tallahassee no later than 2:00 p.m. on May 2, 1988. The RFP scheduled a "preproposal conference" on April 4, 1988 at DOR's district office. It stated further, that any questions concerning the specifications should be directed to Thomas D. Cooper, DOR's assistant director of administration. Under DOR's bidding process, a four person evaluation committee made up of DOR district employees was assigned the responsibility of reviewing all bids and inspecting the proposed office sites. Using twelve prescribed evaluation criteria, one of which was the rental rate, the committee assigned numerical scores to the top seven bids. Its report was then forwarded to Tallahassee as a nonbinding recommendation. There, the assistant director of administration was charged with the responsibility of reviewing the committee's recommendations and to make a further recommendation to the executive director. As always, the final decision rested with DOR's then acting executive director, Sam D. Alexander. It was DOR's intention to ultimately award the contract to the vendor submitting the lowest and best proposal. Fifteen proposals were timely filed by various vendors, including petitioners, Intercontinental Properties, Inc. (Intercontinental) and Nu-West Florida, Inc. (Nu-West) , and intervenor, 241 East 76th Street Company d/b/a Fountains of Plantation (Plantation). After reviewing the proposals and office sites, the DOR evaluation committee assigned the following numerical scores to the top three bidders: Intercontinental-87 percent; Nu-West - 87 percent, and Plantation - 85 percent. However, it recommended that the bid not be awarded to Intercontinental because of its unfavorable site location and because no local government permits had been obtained to construct a drive-through facility. The committee characterized Nu-West's proposal as a "class operation" and noted that 1the committee is unanimous in it's (sic) recommendation that Nu-West Florida Inc.'s bid offers more for the Department when all factors are considered." Finally, the committee criticized Plantation's site location and anticipated delays in remodeling its building. This evaluation was forwarded to DOR's acting executive director on May 17, 1988. On Wednesday, June 1, 1988 DOR's assistant purchasing director, Barbie Foster, gave telephonic notice to all bidders that the contract would be awarded to Intercontinental and that other bidders had 72 hours in which to file a protest. At 11:30 a.m. that same day, DOR posted a "bid tabulation sheet" reflecting the unit cost (per square foot) of office space submitted by twelve vendors and recommending that the contract be awarded to Intercontinental. The tabulation sheet indicated also that unless the parties "file(d) a protest within the time prescribed in section 120.53(5), Florida Statutes," they waived their right to a hearing under chapter 120. Nu-West filed its protest on June 3, 1988. By June 6, two other protests had been filed, including that of Plantation. On June 9, 1988 DOR issued its first written advice on the subject to the parties. The advice, which was in the form of a letter from Foster to the president of Intercontinental, read as follows: This letter is to notify you that as of 11:30 A.M., June 6, 1988, the Department has received three (3) letters of Intent to protest the recommended contract submitted for office space in Ft. Lauderdale, Bid No.: 87/88-238. Enclosed please find copies of the (3) letters submitted. As you are aware, the awarding process on this lease is now at a stand still until the protests are resolved. The Department's legal counsel will be in touch with you in the very near future. Should you wish to contact Mr. Bill Townsend, Director of Technical Assistance, please feel free to do so, he can be reached at (904) 488-0712. A settlement conference was held in Fort Lauderdale on June 17 in an effort to informally resolve the matter. At that time, or shortly thereafter, DOR learned that the proposals of Intercontinental and Nu-West allegedly did not conform to specifications. On June 22, 1988 DOR issued its second notice of intent to award the contract and advised all vendors that the contract was being awarded to Plantation, the third ranked vendor, and that the proposals of Intercontinental and Nu-West were rejected as being nonresponsive. Such notice was in the form of a letter to each bidder advising the name of the successful bidder, giving a short summation of the reason why a particular vendor had been rejected and offering a clear point of entry to a formal hearing. In the case of Intercontinental, DOR advised that Intercontinental's bid was "non- responsive" since it failed "to comply with paragraph D4A, p. 14," it was "not the owner of record of the subject project," and it had not furnished its "authority to offer the facility." As to Nu-West, DOR found its bid "nonresponsive in the requirement of two drive-in stations as set forth in paragraph B14D, p. 14 of the Request for Proposal" because Nu-West had "indicated (it) would provide only one window and a drop box." These letters prompted the filing of formal protests by petitioners. Bid Requirements Pertinent to this controversy are two items in the RFP which formed the basis for DOR's rejection of petitioners' bids. First, Item B14 sets forth various miscellaneous requirements imposed on the bidder. Paragraph D. of that item provided as follows: The Department requires a drive-through teller facility similar to banking and savings and loan institutions. This may be located within the office or may be connected to the office by a pneumatic tube system (minimum of two stations required) (Emphasis added) This item was required because of a recently instituted DOR policy that all district offices have drive-in facilities for taxpayers. As old office buildings are vacated and new ones occupied, DOR requires that the new landlord provide teller facilities. At present, only three district offices in the state (Miami, Tampa and Tallahassee) have teller facilities but DOR plans eventually to install such facilities at all district offices. In this case, DOR envisioned a facility that would be similar to a small banking facility with two work stations that could handle two taxpayers simultaneously. It was necessary that teller facilities be provided since taxpayers often submit money and documentation and pose questions that must be answered by the tellers. As an alternative to two teller stations, DOR considered accepting one teller station and a drop box connected by a pneumatic tube to the main building. However, the use of a drop box without a pneumatic tube was unacceptable since DOR would "lose control" over deposits and lack the necessary security for handling taxpayer money. This item was considered to be material by the agency. Secondly, Item D.4.A. provided that: 4.A. Each proposal shall be signed by the owner(s) , corporate officers, or legal representative(s). The corporate, trade, or partnership title must be either stamped or typewritten beside the actual signature(s). If the Bid Submittal is signed by an Agent, written evidence from the owner of record of his/her authority must accompany the proposal. If the Bid Submittal is offered by anyone other than the owner or owner's agent, proof of the bidder's authority to offer the facility; i.e., copy of bidder's Option to Purchase, must accompany the proposal. This option must be valid through the validity date established for bids. If a corporation foreign to the State of Florida is the owner of record, written evidence of authority to conduct business in Florida must accompany the Bid Submittal. (Emphasis added) The purpose of this item was to give DOR proof that the bidder was authorized to act for the property owner, or, if the bidder was not an agent, to give DOR written assurance that the bidder had an option to purchase, leasehold interest or some other form of interest in the subject property. This was because DOR could not be expected to sign a lease if it was unsure whether it would have the legal right to occupy the property. DOR considered this item to be a material item within the specifications. The first page of the RFP contained the following admonition to bidders: It is the bidder's responsibility to be familiar with all aspects of the bid package outlined below and attached hereto. Finally, page 14 of the RFP contained the following certification to be executed by the bidder when the bid was filed: I hereby certify as owner, officer, or authorized agent, that I have read the request for proposal package and all its attachments and acknowledge my understanding of and agreement to abide by all requirements and conditions contained therein. Intercontinental's Bid Intercontinental was not the owner of the property that was offered to DOR in Intercontinental's bid submission. This was confirmed at hearing by Intercontinental's leasing agent, Nestor Mendoza. According to Mendoza, the property was owned by a partnership using the name "441 South Partnership" but was leased to Intercontinental prior to the bid being submitted. Intercontinental filed its bid in Tallahassee on May 2, 1988. The certification on page 14 of Intercontinental's submission was signed in the following manner: Intercontinental Properties, Inc. Bidder's Name (typewritten) 59-1508950 Bidder's F.E.I.D. or S.S. Number (Illegible) Authorized Signature (manual)(Seal) Caroline Weiss Authorized Signature (typewritten) President Title (typewritten) Notwithstanding the requirement in item D.4.A., there was no documentation attached to Intercontinental's proposal reflecting that Intercontinental had authorization from the true owner to submit a bid or that it had a legal interest in the property. Therefore, DOR assumed that Intercontinental was the legal owner of the property. According to Mendoza, he carried documentation to Tallahassee on May 2 confirming Intercontinental's interest in the property but did not attach it to the proposal because he was under the impression that such documentation was necessary only if Intercontinental was "acting as an agent." Even though this "impression" was contrary to the requirements of the specifications, Mendoza maintained that he understood all RFP requirements. Mendoza was elated after receiving a telephone call on June 1, 1988 from Foster, who advised that Intercontinental had received the award. He was told also that, unless protests were filed within 72 hours, the firm would win the contract. In giving its preliminary intent to award the bid to Intercontinental, DOR overrode its committee's contrary recommendation. After a closer examination of Intercontinental's submission was made, DOR learned that, while Caroline Weiss, Intercontinental's president, had executed the bid submission, Intercontinental was not the legal owner of the property that was described in the proposal. DOR noted also that there was no documentation attached to the proposal, as required by item D.4.A. At a settlement conference held on June 17, 1988 Intercontinental maintained it had a leasehold interest in the property but declined, for whatever reason, to give DOR representatives any proof of this assertion. Because of this, DOR concluded properly that Intercontinental's bid was nonresponsive. During final hearing, Mendoza pointed out that, prior to the bid being submitted, DOR representatives had never questioned him concerning who was the true owner of the property and that he never made representations that Intercontinental owned the property. Intercontinental twice attempted to offer into evidence at hearing what purported to be a copy of a lease agreement in which Intercontinental had leased the property in question from another party. However, the document was never properly authenticated. Even if it had been authenticated, it was too late for Intercontinental to modify its bid submission since the documentation was required with Intercontinental's original submission filed on May 2, 1988. Nu-West's Bid Nu-West first learned of DOR's interest in new office space in February, 1988. After obtaining an RFP, Philip Saia, Nu-West's director of marketing and leasing, telephoned DOR's assistant director of administration to get clarification on several items in the specifications. Saia was told by Cooper to attend a prebid conference on April 4, 1988 in Fort Lauderdale. Also, he was told to telephone John Driggers, the author of the RFP and a district employee. Saia telephoned Driggers and was advised that all questions would be answered at the conference on April 4. Early on the morning of April 4, Saia met with Driggers and Bernard Fox, DOR district administrator, to discuss the item relating to the drive-through tellers and to show them Nu-West's facility. Saia's concern was that, due to space limitations and the cost of a pneumatic tube system, Nu-West would be priced "out of the ballpark" and would be unable to submit a bid. The three discussed other alternatives but reached no agreement. Driggers denied telling Saia that his proposal would comply with specifications but conceded he "probably led them to believe" that Saia's proposal would be "acceptable." Fox's principal concern was whether sufficient security could be provided for an unattached drop box. He voiced this concern to Saia. At the prebid conference later that day, another vendor queried the two DOR representatives (Driggers and Fox) about the drive-through teller requirement. Saia asked no questions. However, Saia contended that, in response to the other vendor's question, DOR representatives were "vague" and left the matter "very open." The actual dialogue between the vendor and Driggers is reflected in the transcript of the meeting received in evidence as DOR exhibit 1. According to the transcript the following exchange on the subject took place: (by unidentified vendor) On the drive through facility you asked about the pneumatic . . . you have a requirement for pneumatic tubes. (by John Driggers) Okay. On the drive through facility what we are trying to reflect there is we would prefer a facility for security purposes that would be contiguous with the office so that it would not be located away from the office. We would entertain a remote type facility that was connected with the office by pneumatic tubes or something that would be feasible. We don't necessarily kick out the possibility that we might use a facility that would not be contiguous to the office itself. However, we would look at that very carefully to make sure that it did meet requirements and that we could feel that it would be a secure place to use for the employees and for the . . . We do accept cash in these offices. What I'm trying to do is to give you some options there because there is no telling what kind of facility that you could come up with that would be acceptable. (Emphasis added) Driggers also advised vendors that if they had any further questions, they should be addressed to Fox. Saia concluded that, given the space limitations in Nu-West's building and the need for a local government site approval plan, the most cost-effective way to meet the requirement was to have one drive-through teller "adjacent to the building" and a drop-box in a separate location not contiguous to or connected with the main building. The use of a drop box was based on Saia's impression that DOR wanted the capability of receiving customer deposits after regular business hours and that a "facility" was not necessarily a teller window. He reasoned that this was comparable to the type of facilities used by banks and would be "a good solution to the problem." To reinforce his idea, Saia met with Fox a second time on April 19, 1988 and showed Fox his proposed plans. According to Saia, Fox told him the plans were "very acceptable." However, Fox's recollection of the conversation was different, and he remembered making no such commitment that the plans were acceptable. Instead, Fox told Saia that a drop-box with one window was better than only one window but that his overall concern was with security. In any event, Saia relied on this meeting to formalize the drop box plan in his bid submission. He went so far as to submit the plans to the City of Lauderdale Lakes for site review approval. Nu-West's submission was timely received by DOR. On page 8 of 14 of the RFP, Nu-West responded to the drive-through teller requirement with the following statement: Drive through teller window and one outside drop box will be provided in the manner shown on the enclosed site plan, subject to final approval by the City of Lauderdale Lakes, which has been applied for. (Preliminary approval has been obtained). The attached site plan is depicted on Joint Exhibit 3A and reflects a single drive-through teller facility. The drop box did not have a pneumatic tube system connecting the box to the main facility. This constituted a material deviation from the specifications. It is noted that of the fifteen vendors filing proposals, only Nu-West failed to provide for two drive-through tellers. A week or so after Nu-West's bid was submitted, the DOR evaluation committee visited Nu-West's office site. The team stayed on the premises for two hours. Saia recalled that even though the team discussed the proposed single drive-in teller facility idea and was shown its proposed location, he heard no objections. In its written evaluation report of Nu- West's bid dated May 17, the committee made no mention of any deficiency in the drive-through teller proposal and described Nu- West's proposed site as "a class operation." Nu-West was also given a grade of 87 and unanimously recommended for award of the contract. On June 2 Saia was advised by telephone that Intercontinental had been awarded the bid. Thereafter, Nu-West timely filed its protest. At the settlement conference held on June 17, Saia was not told his bid had been rejected because it was nonresponsive. He did not learn this until he received a telephone call a few days later from DOR's acting executive director. This was followed by DOR's letter of June 22 advising that Plantation had been awarded the bid and that Nu-West's bid had been rejected on the ground the proposal did not provide for two drive-through tellers. When this final decision was made by DOR, neither Cooper or Alexander were aware of any representations that might have been made to Saia by Fox or Driggers. Nu-West is willing to modify its proposal to provide a second drive- through teller. According to Saia, it can be accomplished with a $72,000 allowance Nu-West set aside to cover any deficiencies incurred during renovation. However, these modifications should have been filed with the original bid package in order to conform to specifications. Plantation's Bid Plantation was ranked number three numerically by the evaluation committee but, after the disqualification of Intercontinental and Nu-West, it had the highest numerical score and was considered the lowest and most responsive bid. Although Nu-West's proposed location in Plantation was questioned by another vendor as being in an inaccessible area of the county, DOR representatives concluded the office site was satisfactory. All material specifications were met by this bidder. 2/ Using a present value of lease payments, Plantation's bid was $1.23 per square feet cheaper than Nu-West's bid proposal but was slightly higher than Intercontinental's proposal.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered awarding Lease Bid No. 730-0083 to 241 East 76th Street Company d/b/a Fountains of Plantation. DONE AND ORDERED this 5th day of October, 1988, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings 5th day of October, 1988.
